Buying A Property In Canada

Canada offers the intrepid plenty to go at. Stretching more than 3,400 miles from east to west coast, every kind of terrain greets those who don't fear to tread. But would you dare to buy there?

By Gordon Miller

Much of the land above the 53rd parallel (two-thirds of the country) is largely uninhabited, but below it you will find established cities - Montreal, Quebec and Toronto on the eastern seaboard, Vancouver and Calgary on the west - a thousand linear miles or so of prairie in the middle, and enough dramatic scenery elsewhere to awe even the most experienced of travellers.

Take the Rocky Mountains, which form the spine of the west coast from north to south. Soaring to a magnificent 3,954 metres and spread over an area of approximately 7,750 square miles, which is the size of Wales, the Rockies, as they are better known, encompass several National Parks, including Banff and Jasper, and the Western Canadian provinces of British Columbia and Alberta.

Alberta has been at the forefront of a booming western Canada economy over the last decade. Fuelled by oil and natural gas deposits, Alberta has presided over a $12bn (£6bn) bonanza in the last two years. The profits are not being squandered. An estimated $4bn (£2bn) has been pledged for public transport proposals in and around Calgary, the state capital and economic centre, and for carbon capture and storage (CCS) projects. On the back of the boom, house prices more than doubled in the state between 2002-2007.

Nationwide MLS® resale prices rose by an average of 11 per cent in each of 2006 and 2007, according to the Canadian Real Estate Association (CREA). In the wake of the US-inspired credit crunch prices began to slip back last year. The average resale price of residential properties sold through the Multiple Listing Service® (MLS®) dropped 9.9 per cent to CA$281,133 in October 2008 from a year earlier. Ontario registered the biggest drop (-10 per cent), followed by British Columbia (-6.5 per cent), Alberta (-3.7 per cent) and Quebec (-0.1 per cent).

Looking forward, property development in Canada is unlikely to return to previous boom levels for at least four years, claims a report from the Canada Mortgage and Housing Corporation. CMHC points out that Canada's housing market has not experienced the kind of collapse that has characterized the US market, which has seen new house starts fall to about a quarter of previous levels. The CMHC said Canada's experience is more in line with an orderly decline from record levels, both in terms of starts, sales and prices.

The decline can be blamed on several factors including the current economic climate, increased competition from the existing home market and the impact of strong house price growth between 2002 and 2007, according to CMHC chief economist Bob Dugan. He said: 'Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.'