Canada vs. USA: We are still better choice for real estate investors

Flags of Canada and the USA by Sam
Flags of Canada and the USA by Sam

Countries around the world have readjusted the boom period prices and now are offering real estate properties with interesting discounts. This is what real estate investors are always waiting for. To pick up the geese that will lay the golden eggs. So what’s the situation for traditional North American rivals, Canada and the USA?

Real estate prices in the USA dropped much more than in Canada (where the prices have actually already rebounded) and their mls listings are crammed with stock. This might sound like the best place to invest. However, professional investors and analysts still see Canada as a better place to spend some spare investment dollars.

Global Property Guide experts still warn of rushing into the US market and suggest Canada as a more viable option. Despite the latest signs of stabilization, the market bust in the US may still not be at the end. Yields are moderate to poor; the tax system is complicated and the rental market heavily pro tenant. Therefore the US market received only 2 stars out of 5 in a long term investment rating chart.

Although Canada is not the hottest market in the world (top rated is Uruguay, followed by other South American markets), we have received 3 stars, especially for good yields, stable economy, a better tax system and a strong rental market for immigrants (Canada is represented by Toronto and the USA is represented by New York).

Another good reason to invest in Canada is lower transaction costs. Model property (resale $250 000 condo in major city,cash paid) transaction costs (including registration costs, real estate agent fees, legal fees and sales and transfer taxes) count for 6.96% of the sale price in Canada, while it’s 9.07% in the USA. The 2% gap makes quite a difference for investors.

One comment on “Canada vs. USA: We are still better choice for real estate investors

  1. Real estate is local, so it’s hard to say which would be better USA or Canada. I think it’s more important to look in both areas to find cities and communities that fall into your investment requirements.

    That said, I sell real estate and own a property management firm in Saint John, New Brunswick Canada. We’ve been sheltered pretty well from the past and ongoing economic unrest. It’s important to look at what measures are being taken to avoid economic problems and a drop in real estate resale values. At the end of the day, buy low and sell high.

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