■ Canada’s residential market has been supported by low interest rates, a strong domestic economy and a steady flow of international buyers into its major cities.

■ As in many locations, asset price growth is expected to ameliorate in the wake of future interest rate increases. A key indicator of an overheated market in these circumstances are low rental yields. With income returns over 5%, we do not see that most Canadian markets will be vulnerable to price falls.

■ While some of Canada’s major cities may now look more fully valued on this yield basis, the country’s leisure enclaves, with lower capital values appear increasingly attractive investment propositions. There are deals to be done in those locations where prices have now bottomed out.

■ Canada has seen plenty of overseas buyers since 2008, but these have hailed mainly from Asia, favouring urban, rather than resort, locations.

■ A resurgence in the second home market is anticipated as broader economic recovery in the US and Europe brings new overseas buyers to Canada’s leisure hotspots.

Taken from
Spotlight: Canada Residential Market - Spring 2014