The real estate market in Vancouver is overpriced

Buying property outside of Europe: "Canada is a haven"

Vienna - Some Austrians have faint doubts about Europe's long-term progress - economically and politically. In the domestic real estate industry, it is observed that some are investing more and more outside the continent. The second largest country in the world in terms of area is now high on the popularity scale: Canada.

"European standard of living"

"Many Austrians who can afford it look around the world. They try to assume a pioneering role," says Richard Buxbaum, head of residential property marketing at Otto Immobilien. "The question is: Where can I live on a European level? You get to Canada very quickly."

The high quality of life speaks for the country, especially in the cities, which, like European metropolises, have many parks and green spaces, as well as a similar culture and legal security. In addition, it is comparatively easy to immigrate to Canada, says Buxbaum, whereby he qualifies: "As a rule, it is not about the buyer wanting to live directly in Canada." But after Brexit and Donald Trump's election victory in the United States, "people are considering where the global economy could go. Canada is an interesting refuge there."

Alternative to the investment in Europe

The lonely top in the list of the most popular Canadian cities - and therefore also the most expensive - is Vancouver. This is followed by Montreal and Toronto, some buyers would also look to Ottawa and Quebec City, says Buxbaum. Vancouver also leads the Prime International Residential Index of the international brokerage group Knight Frank. There the price increases in metropolitan regions of the world are listed for investors. Vancouver is in first place with a 24.5 percent increase in the price of luxury real estate, ahead of Sydney (plus 14.8 percent) and Shanghai (plus 14.1 percent).

One who has invested in Canada is the Viennese lawyer Stefan Artner. For a few months now, he and his wife have owned an apartment of around 60 square meters in a high-rise in Vancouver.

Vancouver: More expensive than Vienna

"The idea behind this was spreading the risk," he says. He sees the new apartment in Canada as an addition to real estate in Vienna. But: "You don't know exactly where the European Union is going and how the European economy is developing as a whole. You could go to England, but that's not so great with Brexit at the moment. You could go to Switzerland, which will move away from you but cannot decouple the development in Europe. "

Artner and his wife already knew Vancouver from trips and have friends there. The real estate market is very professionalized. The purchase was made with the help of a local broker and a Canadian lawyer. The apartment is already rented out, a so-called property manager helps Artner because landlords in Canada have different obligations than in Austria. "If the washing machine is broken, a tenant calls his plumber in Austria, but his landlord in Canada," says Artner.

"No emigration"

As an Austrian buyer, he had to accept a financial disadvantage: Canada has been collecting a special tax of 15 percent of the purchase price from foreigners since August, in addition to the real estate transfer tax. Even if the rents in Vancouver are significantly higher than in Vienna, its return does not, "but the return was not my concern".

Would Artner and his wife want to move to Canada themselves? "Not from a normal point of view," he says. "If you have to flee, you can't choose where to go anyway. It's not about emigrating to Canada."

Wide country, narrow market

Many US citizens are likely to seriously consider residing in Canada, as the increase in American Google searches after the presidential election showed. "The Canadian real estate market will change," believes Otto Immobilien's Buxbaum. The market is likely to become even tighter and properties are becoming more expensive. But Buxbaum does not think that it is now too late for Europeans to invest in Canada's metropolitan regions. (Lukas Kapeller, November 22nd, 2016)