And it is European investors, helped by a strong Canadian dollar, that are buying second homes, many of them to rent to holidaymakers.
'Affluent Americans unaffected by the recession and Europeans looking for more remote luxury destinations are buying second homes in Canada,' according to Knight Frank real estate.
Places like Victoria on Vancouver Island and Chester, Nova Scotia are flourishing. Ski resorts are also popular.
In the greater Vancouver area, for example, purchases of homes costing 2 million Canadian dollars and up rose 50% in 2007 according to a report released by RE/MAX of Western Canada. In Kelowna, purchases of homes at this price rose 64% in the same time period.
However Elton Ash, executive vice president with RE/MAX Western Canada, says troubles across the border are bound to affect Canada's property market within the next year. 'Canadian buyers, many of whom work for companies based in the United States, will begin to act more frugally. The two economies are too closely related for there to be no Canadian downturn whatsoever. But luxury real estate will remain insulated from any woes,' he predicted.
'It's a separate market that drives itself,' said Nash. 'And right now, demand for high-end real estate, especially lakeshore property, is huge.' He believes the hottest spots include Muskoka, Kelowna and the home of the 2010 Winter Olympics, Whistler.
Other areas with a limited amount of luxury real estate, but a lot of buzz, include the west coast of Newfoundland and St. Andrews by the Sea, New Brunswick, which is seeing increasing traffic from the UK and Ireland, according to Christine Martysiewicz, a spokeswoman for Re/Max .
Although most homes in these areas don't reach $1 million in price, they're attracting attention from European investors who recognize the value. Most of the homes are right on the water, and job opportunities are growing. There is nearly $10 billion in combined capital works projects pending for Newfoundland and Labrador's Avalon Peninsula.
Canada, coast to coast, has an abundance of recreational property areas,' said Martysiewicz.
