MONTREAL/EDMONTON (Reuters) - Foreign investors are snapping up ski chalets and commercial properties in Canada as a drop in the nation’s sagging currency in the past two years means their money buys much more.
The bargains are especially attractive in Alberta’s resort country, where home prices in the energy heartland have fallen with the price of oil, adding to the 25 percent drop in the value of the Canadian dollar since 2013.
“Canada is absolutely gorgeous, but I‘m on more of a time schedule because the dollar is so bad,” said Dave Smith, who owns a New York information-technology business and is looking for an Alberta property. “It’s crazy not to invest in it now because it’s just a matter of time before it bounces back.”
While local buyers have disappeared, realtors in the picturesque Alberta mountain cities of Canmore and Banff hope foreign interest can counter the slump in the province, where the unemployment rate has climbed to its highest level since 2010.
“Things dried up significantly until about six months ago, when the dollar started turning,” said Christian Dubois of Sotheby’s International Realty. “In fairly strong numbers, we’re starting to see inquiries coming again.”
Dubois said the biggest uptick in interest was from the United States and Britain, returning demand to levels he had not seen since the mid-2000s.
Wealthy foreigners are also buying in the ski country in neighboring British Columbia, where Asian money is often credited with buoying the Vancouver housing market.Commercial real estate is benefiting as well, with some investors seeing Canadian properties as an attractive alternative to low bond yields and tumultuous equity markets.
Foreign investment in commercial properties in Toronto hit its highest level last year since 2007 at almost C$1.1 billion ($774.59 million), according to RealNetCanada Inc data. Of the 39 deals worth C$1 million or more, 90 percent occurred in the second half of the year, when the currency’s decline sped up.
Vancouver is hot as well. European billionaire Klaus-Michael Kuehne is about to acquire the Royal Centre office building for about C$420 million from Brookfield Canada Office Properties BOX_u.TO, a source familiar with the deal said.
This would be the highest price ever paid for such a property there, industry data shows.Kuehne’s representatives and a Brookfield spokesman declined to comment.
To be sure, some U.S buyers are treading cautiously after snapping up vacation properties in the early 2000s, when the Canadian dollar hit record lows, only to be forced to sell when the global financial crisis hit.
North of Toronto, where the rich and famous have often boasted the biggest cottages on the best Muskoka lakes, the discounted Canadian dollar also offers another way for U.S. visitors to take advantage: by building up.
“The Americans that own in Muskoka right now are doing massive renovations - complete tear-downs or rebuilds,” said real estate agent and builder Bob Clarke. “And that’s based on the dollar.”
With additional reporting by Andrea Hopkins and Matt Scuffham in Toronto, Julie Gordon in Vancouver and Richard Woodbury in Halifax; Editing by Lisa Von Ahn