Canadian companies have turned to the United States as a source of new properties, and are outpacing every other country in net real estate investment in the US market.
The reason for this trend is a lack of availability at home, which means investors are forced to look further afield for opportunities. So what better place to look than Canada’s closest neighbour and largest trading partner?
According to PricewaterhouseCoopers LLP, Canadians have been buying about US $27 billion more property in the United States than Americans have purchased in Canada over the past four years.
Commercial prices have been depressed, just like the housing market, which has created a great opportunity for Canadian buyers to go in and find bargains. The strong-performing Canadian dollar and access to low interest rates for credit has allowed them to outbid local investors.
Most Canadian buyers in the past 12 months were public companies. Pension funds were in second place and private entities were in third place.
Investors will continue to be drawn to the US market, due to its proximity to Canada, and the size of the market. The laws are similar and the fact that business is conducted in English is another major factor in its favor. The Canadian market is much smaller, with limited opportunities, and there are still deals to be found south of the border.
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