Investors’ flight to Canada a distinct possibility post-Brexit

The U.K.’s signalling of its desire to exit the European Union might initiate a capital flight to other markets, according to an industry observer.
In his recent analysis, founder and chief analyst Walter Melanson argued that the lengthy process involved in the U.K.’s departure would make investors start looking for better prospects elsewhere, as reported by Romana King for MoneySense.
“Investors still want to buy real estate. They still want to park their money in an inflation-protected investment,” Melanson stated. “And despite headlines of overheated markets, Canada still looks like a great deal.”
“They’re not looking for cash flow by renting it out or to make a buck on the appreciation value. They’re looking to park their money. It’s a flight to safety,” he added.
Melanson said that Canadian authorities need to start thinking about making the whole country, and not just select pockets, more attractive to investment—and locales outside the overheated housing markets of Vancouver and Toronto would be good places to start.
“We don’t want to scare money out of Canada, but the feds need to figure out where they want foreign investment and then build those incentives,” Melanson said.
The results of the Brexit poll, which had the “leave” side winning by a slim margin, sent global markets on a tailspin due to the resulting uncertainty.
The withdrawal of the U.K. from the EU would necessitate the negotiation of new and separate agreements with Britain’s trading partners, including Canada. Observers warned that this is a hideously convoluted process that would take years, and even possibly decades, to complete.

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