The Property Market in Canada

A brief look at the market for real estate in Canada.

What does the Canadian property market have to offer investors and private buyers?

Real estate in Canada is big business.

The real estate market in Canada is strong and has seen significant growth and positive development since 2000. 

The levels of growth in property in Canada have slowed down since the start of 2004 but are not expected to decline significantly. 

As the general wealth and GDP of Canada’s citizens has grown, the property market in Canada has grown proportionally as well. 

The real estate market is supported by rising personal income, higher levels of affordability and people’s desire to own rather than rent - add to this the fact that the global stock markets have failed to produce expected returns in recent years and that the risks associated with investing in financial instruments are significantly higher than risks associated with property investment, and you can see why the house buying market in Canada is big business and the Canadian real estate market is so strong.

If you are considering purchasing you will find that the system is really very straightforward, in fact it has most of the same fundamental aspects that both the US and UK systems employ for example.

Worth bearing in mind however are extra expenses you may incur when buying a house.

The extra costs can differ depending on which Canadian province you are considering buying real estate in and a good real estate agent will make sure you are aware of the bigger picture before you agree to buy - but as a general guide consider factoring in these extra costs when purchasing: -

• Land transfer tax - which is a sales tax on property in Canada.  These taxes are levied on property that changes hands and are the responsibility of the purchaser.  It does depend on where you are moving to in Canada but generally the tax ranges from half a percent to two percent of the total value of the property…in Alberta, Saskatchewan or rural Nova Scotia you don’t have to pay it!
• A mortgage broker’s fee
• An appraisal fee
• Survey costs
• Mortgage insurance
• An interest adjustment - Mortgages are normally calculated from the first of every month and if your closing date is the same as the beginning of your mortgage there will be no adjustment.  An adjustment is incurred if your closing date and mortgage date differ and the number of days difference will be the interest adjustment period.  Your mortgage lender may expect you to cover the cost of interest during that time.
• Reimbursing the seller for any unused portions of prepaid property taxes or utility bills
• Legal fees
• Estate agent or realtor fees
• And finally you may need to prove to your mortgage lender that you have insured your new house