Canada bucks North American property blues
It is not all doom and gloom in the North American property markets. Canada is attractive to property investors as it continues to experience strong growth, both in house prices and rental returns, it is claimed.
'Canada's current housing boom is attributable to three main factors; a strong economy supported by the energy sector, low mortgage rates and high levels of immigration,' said Emma Holifield of Property Frontiers. 'The economy has been growing steadily and successfully, averaging around three per cent since the early nineties,' she added.
For example last year, the average rent for a two bedroom apartment in Canada increased by 3.2 per cent, while rental incomes in the province of Alberta rose by a "phenomenal" 13 per cent. In the recent past, property prices in Canada have experienced a growth rate of over ten per cent a year, she explained.
Canada was recently named as one of the top ten most attractive environments for tourist developments by the Economic Forum's Travel and Tourism Competitiveness report.
And the most recent analysis of average rental rates has concluded that despite higher than average house prices (typical around £280,000), the length of season for attracting holidaymakers is longer than average and rental rates are higher as a result of demand for and quality of the properties.
Rental yield is projected at around 10 per cent for a mixed use investment based on 22 week occupancy, which compares favourably with 3-5% yield achieved by a similar calculation for properties in the European Alps. Yet with actual year round potential for attracting tourists/guests, the prospects for reaping even more rental income is significant.
Ross Elder, managing director of holidaylettings.co.uk, a leading portal for holidaymakers booking direct with property owners, comments: 'Canada seems to have it all in terms of attractions, amenities and real home from home properties. However, it probably needs to see lower transatlantic flight costs before it attracts Britons and Europeans more regularly. That said, it has North American holidaymakers on its doorstep and as an activity packed destination will appeal to both families and action heroes alike.'