TORONTO — MortgageCalculator.ca is the industry’s leading Financial Planning Tool that is designed to help real estate buyers compare current mortgage rates of multiple Canadian financial institutions.
Sam Kamra, a Realtor, private lender and co-founder of MortgageCalculator.ca, shares his insights on the Coronavirus and its potential impact on Real Estate in Canada.
Coronavirus, the deadly disease is spreading its wings and leaving a scary mark in various nations across the globe. For China, the epicenter of this respiratory virus outbreak, it’s nothing less than a big nightmare.
With over 7700 confirmed cases of the mysterious new illness, more than 170 people already dead in China (around 2% death rate), and several cases reported in 20 different countries, the Wuhan virus has become a serious point of concern everywhere.
But, other than severe health risks, is there something you need to worry about economically and financially? As a potential Real Estate investor, you have to be conscious of any ripple effects that could affect your buying and selling decisions.
Chinese Investments Worldwide: Past Facts
Chinese investors actively expanded their overseas footprints by investing both in commercial and residential real estate. As per a survey conducted in 2018, more than 1/3rd of Chinese millionaires considered emigrating to US and Canada amongst other locations.
Facts state; the total Chinese investment in international properties zoomed from $5 billion in 2010 to a massive USD 119.7 billion in 2017. A great spike in the foreign investments flowing from China to other nations! Political resistances and foreign taxes added certain limitations and dipped the overall figures in 2018-19. However, it could not suppress the ever-growing desire of investors to own luxury homes and other attractive properties in North America.
And, Canada has been one of the topmost investment destinations, a hotspot for Chinese immigrants and wealthy investors.
For a better education, healthier environment, and lifestyle – pouring of money from Asia into Canadian properties has surely driven real estate growth. Undoubtedly, the frenzy buying habits of rich Chinese investors boosted Canadian housing prices to unbelievable new heights.
A Reality Check for Canada
A noteworthy increase in foreign buyers (especially from China) has been observed in the past decade or so. Hence, it gets really important to weigh the impact of this contagious Coronavirus wave on the housing markets in Canada.
With only 2 confirmed cases in Toronto, the situation seems to be under control in Canada. Keeping our fingers crossed, hoping everything is going to be managed perfectly! If Canada succeeds to evade this major pandemic, a transitory period of insecurity and panic, its economy can bear the hard blows, if any.
Looking at a 2015 study from the non-profit organization Berkeley Earth that estimated 1.6 million people in China die each year from heart, lung and stroke problems because of polluted air, current epidemic death toll rates don’t seem to be that dangerous, at least as of right now.
With the mounting fears of Coronavirus in China, it’s obvious for more people willing to shift and settle elsewhere. Once the situation normalizes, will that bring another era of inflation in Canadian Real Estate?
The Real Impact
The immense disruption of travel, business activities, locking down of numerous cities, and stagnant life in China has raised some global risks and concerns. Canadian officials say that “The risk of outbreak in Canada remains low” and they take all preventative measures to stop the virus. There are already multiple systems in place, which can detect and respond, in order to prevent the spread of Coronavirus.