Friday, February 5, 2016

The case for Americans investing in Ottawa, Ontario, Canada...

A very interesting article was dropped on my desk this week .... http://www.cbc.ca/beta/news/business/snowbirds-loonie-real-estate-1.3425322 -  

This is the reverse of the current cycle we see starting now to develop.  Oil being $30/barrel (or less), has driven the Canadian dollar down and as a result made Canadian real estate super affordable.  You can buy a home in Canada at a 30% plus discount, just based upon currency devaluation.  Economists are in agreement, once the price of a barrel of oil raises, the Canadian dollar shall follow.

I am currently working on some to be built condo buildings, which will be available under current market prices and professionally managed.  These wholesaled properties are to be built in desirable neighbourhoods.  Currently, the rental market is very strong in Ottawa, boasting a vacancy rate of 3.4% and dropping (http://www.obj.ca/Real-Estate/Residential/2015-10-26/article-4321974/CMHC-expects-Ottawa-housing-market-to-buck-national-trend-in-2016-and-2017/1)

For American buyers, now is a good time to invest in Canada, with the dollar currently sitting at $1.38 v Cdn.  Over the 10 year rolling average, the range has been $0.92 to a high of $1.47 (http://www.xe.com/currencycharts/?from=USD&to=CAD&view=10Y).  If you can buy, make instant equity on the purchase and then make $0.15 plus on the currency exchange, once oil prices start rising again.  Your clients are sure to realize large gains.

Ottawa is consistently ranked as one of the top cities in the world in which to live and raise a family.  According to Mercer, we ranked third in North America for quality of living and Today’s Parent says we are the second best place in the country to raise a family.  Profile of some urban neighbourhoods - http://www.livingin-canada.com/best-places-to-live-ottawa.html

Ottawa is in the home stretch of construction on the Light Rail Transit (http://www.ligneconfederationline.ca/), the largest and most important public infrastructure project since the UNESCO World Heritage Site, the Rideau Canal, the world's longest skating rink (https://www.ottawatourism.ca/ottawa-insider/rideau-canal-a-unesco-world-heritage-site/).  Just as the Canal changed Ottawa in 1832, the Light Rail Transit will be a driving force into the future, a necessary development as Ottawa crossed the magical 1,000,000 citizens mark in the coming years.

For mortgage financing, due to our close proximity and international relationships, USA buyers are welcomed into Canada.  There are two avenues for non-resident purchasers, traditional and alternative lending.  

For traditional lending
Amortization: 30 year max
Rate: Current best bank rates (i.e. 2.59% on a 5 year fixed)
Term: All terms available to clients
Down payment: 35%

For alternative lending
Amortization: 30 to 35 year max
Rate: Starting typically at 4.25%
Term: 1-3 years typically
Down payment: 20%

Another interesting development in Ottawa this past month is that Apple Inc, with their $200 billion in free cash, has leased space in the city and is opening an R and D facility where it is rumoured they will be developing the new "Apple Car software".  http://www.nationalpost.com/apple+ottawa+slicing+through+speculation+about+tech+giant+plans+canadian+capital/11690361/story.html

A major World Class company like Apple is moving to the Ottawa market due to the highly educated work force.  Ottawa is considered Silicon Valley North, and houses the most technology companies of any city in Canada.  (http://ottawarealestatepros.blogspot.ca/2016/01/ottawa-is-excellent-g7-capital.html)

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