There are more American and British Investors that are already coming to invest in Canada. But existing foreign investors in Canadian provincial-bond market are said to be cashing out their reserves.
The Canadian Real Estate Magazine reports that Christian Dubois has observed the sudden rise in British and American investors. Dubois is the senior vice president for Sotheby's International Realty Canada. He adds that the increase in demand has reached to heights that have not been witnessed for the last 10 years. This influx of inquiries started when the dollar started turning six months ago says Dubois.
Analysts and observers said that the exchange rates are the reason for this unexpected growth of foreign investors. The Canadian dollar was in a sporadic 25% drop since 2013. While the median price of homes in the real estate market has decreased almost abruptly. As for the economy, it's on a downhill slide due to the crash in global oil prices.
News in the Canadian real estate shows foreign investors actively building estates.
"Canada is absolutely gorgeous, but I'm on more of a time schedule because the dollar is so bad. It's crazy not to invest in it now because it's just a matter of time before it bounces back," New York-based tech entrepreneur Dave Smith said.
Aside from property purchases, foreign investors are quite active in building up estates. The volume of foreign investment has reached close to $1.1 billion according to RealNetCanada, noting at least $1 million worth of transactions transpiring in the second half of 2015.
However, the Financial Post says that foreign investors in the provincial-bond market are cashing out on their investments. Since the initial selling started a 35 point basis has been noted as of August for Saskatchewan, Alberta and Newfoundland taking most of the punch. These are just a few of the oil producing regions in the country that has been affected.
The Bank of America Merrill Lynch gave British Columbia, Ontario and Quebec 25 basis point increase in their data.
International foreign exchange reserves have dwindled from 5% to $11 trillion over the past year. Representing a third of the world total are the Chinese reserves which have decreased 13% to $3.3 trillion.
Investors are trying to find value over their dollar in other regions or global fixed-income markets in hopes to recover. The implementation of new regulations has made it a lot more difficult for them to trade.
On the lighter side, there are still investors that see these times as a buying opportunity for them. For them Alberta has presented the most opportunity for them. Citing the cheaper price bonds due to oil price decrease, a "pristine balance sheet and a lot of tax capacity" are the reasons for Pacific Management Co.'s investment in the area.
What do you think about the current economic status of Canada?
