What to look at in 2015.
This is going to be a very interesting and exciting year in Canadian Real Estate. With new immigration policies and lower interest rates globally, we’re seeing some major changes.
This year on January 1st, the Canadian government introduced a new system that will fast track the process for permanent residency. The goal is to bring in young, highly-skilled immigrants that will help fill the gaps in our country’s labour needs. The first-come, first-served basis we were previously operating on will no longer be in effect. The government will essentially serve as a headhunter for highly-skilled immigrants and Canadian employers.
The issue that this new system is going to present is that financial security is no longer going to be a factor when it comes to the decision making process. Wealthy people are not going to be let in or even considered for permanent residency if someone else has skills that better match our immediate needs. The emphasis has moved towards skills that towards skills that could fit into our society and culture well, but not necessarily skills and attributes that could change our society for the better. By shying away from wealthier immigrants, the Canadian government is missing out on a big network of individuals that could bring more skills and more value than they are getting credit for based on our new system.
From a Real Estate standpoint, individuals form this particular network will bring employment opportunities with them; they will invest in businesses and buy properties and we will ultimately benefit from the long-term effects. Canada needs to add new innovations to their program that will allow immigrants with high net work the same opportunities for permanent residency as the highly-skilled individuals.
Currently we are seeing a global interest rate that is barely above on per cent. Canada is trying to hold onto a very positive market by not lowering its interest rates, but with currencies dropping around the world, the nation does not have much of a choice. With the fear of inflation growing, Canada will be forced to lower interest rates within reasonable guidelines. What this will translate to in the Oakville market in particular is consumer confidence and long-term borrowing. We will see more and more people locking into their mortgages at a fixed seven-year rate to ease the anxieties and concerns over future interest rate increases.
These lower interest rates will increase the market dramatically for homes under $1,000,000. I am predicting an increase of about 8-12 per cent for homes in this market. For homes over $2,000,000, we will see the market and prices level themselves out this year. The market for homes over $10,000,000 will always be a difficult area to predict. I expect that, much like previous years, the sale of homes in this bracket will be entirely circumstantial and dependent on the properties themselves, the location and the features.
To summarize, 2015 is going to be a good year to invest in Canadian Real Estate.