Strong investment opportunities in Canada

The underlying strength of the Canadian economy is likely to prove beneficial to property investors considering a purchase in the country.

Of the G8 group of nations – which also includes the UK, USA & France - Canada is the only country likely to avoid recession during the current economic downturn.

Its strength is based on the country’s large oil reserves, which are benefiting from prices of over $100 a barrel on international markets.

As the industry grows, opportunities are available for those with the finances to invest in property in areas set for mining exploration, according to Property Frontiers.

“With such phenomenally high levels of investment and mining occurring, there has been a dramatic increase in the population and employment levels in the areas of Ft. McMurray, Alberta,” explained Emma Holifield, marketing executive for Property Frontiers.

“This influx of people, coupled with extremely limited housing services in Ft. McMurray, has created an acute housing shortage, very high demand and the potential for extremely high returns.”

Canada is thought to have the largest oil reserves in the world - bigger even than Saudi Arabia - with 177 billion recoverable barrels and a further 311 billion barrels estimated to be unrecoverable with current technology.

This ensures the industry will develop for the foreseeable future.

However, investment in the country would be purely financial, with little or no lifestyle options available to buyers.

“Ft. McMurray is not a lifestyle choice investment, nor will it be somewhere to have a second home – that is, unless you love temperatures which can plummet as low as -40,” continued Ms Holifield.

“Rather, this is a pure investment option, and necessarily, figures are attractive.”

This should not discourage investors, as the majority of dealing can be carried out at arm’s length.

“The investment opportunity open to international buyers, then, is to buy property to cater for the oil workers and executives, which can be managed by a company in Canada so that maintenance and tenancy arrangements can be managed from a distance,” explained Ms Holifield.

“Leasing the properties on a fully managed, fully furnished/provisioned basis is an ideal way to ensure constant levels of occupancy and generous yields are secured.”

As a direct result of the housing shortage in the areas, rental yields are very healthy and initial gross yields can be as high as 26 per cent, Property Frontiers believes.