Hongkongers eyeing Canadian homes should move fast, as booming prices to only rise further next year, analysts say
- From January to October, home transactions reached 581,275, surpassing the 552,423 homes sales recorded last year
- Canada’s average home prices have risen by 23.4 per cent year on year in 2021
Home sales in Canada hit a historic high in October this year, and Hongkongers looking to buy property in the north American country should not wait for a correction and make their purchases as soon as possible, agents and analysts said.
From January to October, home transactions reached 581,275, surpassing the 552,423 homes sales recorded last year, according to data from The Canadian Real Estate Association, which represents more than 135,000 real estate professionals. Canada’s average home prices rose by 23.4 per cent year on year in the process.
“I don’t expect prices to decline. If Hong Kong investors are looking to buy into the Canadian market, I would not suggest that they wait for a crash or a correction,” said Keelan Chapman, the Hong Kong-based director and founder of Canadian Real Estate Investment Centre. “It’s better to invest earlier than wait for a correction that may never happen – and then they’re going to get priced out.”
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“The demand has always been there. I would not say there has been an uptick in the demand, but what we have seen is that the amount of enquiries has doubled in recent months,” Chapman said.
Several studies have, however, shown that foreign homebuyers had limited impact on home prices in Canada, as the market was mainly dominated by local homebuyers. Newcomers to the country generally bought properties that on average were C$140,000 (US$109,255) more than those bought by local buyers.
“Top immigrants in Canada were from India, then the Chinese and then from the Philippines,” she said.
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Last week, Canada’s monetary authority kept interest rates unchanged but signalled a potential hike next year, as an increase in consumer prices remained above their forecast.
Any change in interest rates, however, was unlikely to have a big impact on property prices, according to Ignatius KK Chong, managing director and head of private banking, Greater China at Royal Bank of Canada wealth management in Hong Kong. “The expectation is, in short, in 2022 there could be a cool down but not a correction,” he said. “There is a possibility that the market will continue to rise and the cool down is not something to worry about.”
These factors – coupled with pent-up demand owing to delays in construction brought about by the Covid-19 pandemic – made it unlikely that a delay in purchasing a home in Canada would benefit investors, said Kashif Ansari, co-founder and group CEO of Kuala Lumpur-based global real estate company Juwai IQI.
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“Every buyer has to make their own decision. In the current situation, if you expect to purchase within the next two years, it probably makes sense to buy as soon as possible,” he said.
“Although prices seem high, the Royal Bank of Canada says they are likely to be even higher next year.”
