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August 2005
Why Now is a Great Time for
Americans to Buy Real Estate in Canada!
Diversification and asset mix have always been the most important decisions that an investor makes about their "long term" financial future. As we look out into the 21st century I would have to argue that diversification and asset mix are even more important today than they have been in the last 150 years, especially for American investors.
Here's why!
For most of the past 150 years the US economy has been the envy of the world. It has been shaped around the sound foundations of liberty and healthy competition. The leaders of America shared a consistent vision and tended it like a garden planted in an excellent climate. With proper watering and care, America has produced a "crop of opportunity" that abounds in all its regions. Risks can be taken, and are even encouraged! Wonderfully, risk takers have been rewarded over the years in the US like in no other time and place in the history of our world. Americans have a lineage of being the most honest, hard working and innovative people in modern history.
During the last century Americans have enjoyed an ever expanding economic blessing and have reaped a globally unsurpassed lifestyle of comfort and convenience. This is exactly where America stands today.
But there are questions about the future.
In 1958, when Dwight Eisenhower was president, interest rates were at about the same level as they are today, but for very different reasons! At that time the low rates were building the foundation for one of the world's greatest economic expansions that lasted until 1966. Real incomes, quality of life, technological advancement and of course, opportunity to live out the American dream were about to take off in a way never seen before in the western hemisphere. The "war was over" and it was time to enjoy the fruits of some very intense "heavy lifting" put into the American system over the 1930's, 1940's and early 1950's!
Today, the low rates are a symptom of an economic system that is trying to find its way. The "war continues against an unknown enemy that knows no boundaries." In 1958 national debt was non-existent in comparison to today's $7 trillion monolith. www.publicdebt.treas.gov/opd/opdpenny.htm Consumer debts are at record levels as well showing no signs of slowing down at this time. Labor and jobs are being transplanted in countries where people work for $.50 US per hour. In 1958, the US was the world's largest exporter of goods and the largest creditor nation. Today, the exact opposite is true. America consumes 52% of global Gross Domestic Product (GDP) and is the world's largest debtor nation. Again, these trends show no sign of slowing confirmed by the twin $500 billion projected trade and budget deficits.
All these facts don't change the character of the American people. The US has been in tough spots before and the character of the nation has always won out and presented a brighter tomorrow. There is no reason to think today has to be any different.
That said, a little "insurance policy" doesn't hurt either. This is where the investment in Canadian real estate comes in! Vancouver Island in British Columbia Canada affords an exceptional value in our global marketplace.
What is so special about Canadian Real Estate?
The first and most compelling reason to look at Canadian Real Estate is the excellent value it offers at today's prices. Waterfrontvancouverisland.com highlights a slice of the truly awesome opportunities that exist on Vancouver Island in British Columbia, Canada. But there are three more fundamental reasons to take a good hard look at Canadian Real Estate, especially waterfront Real Estate at this time. (One of the reasons is exclusive to US investors!)
Demographic make up of Canada: Canada has a "baby boom" demographic similar to the US. Actually, it is even more powerful. (This means, as a percentage of the Canadian economy, Canadian boomers make up a larger component than the equivalent group of US boomers). This demographic group has "moved mountains" throughout its existence and the move to retirement will likely be no different.
Note that historically it has made sense to try to be one step ahead of the boomers. That opportunity presents itself in full color right now!
Low interest rates in Canada and the US: The low interest rates make it a whole lot easier to look at purchasing waterfront properties as second properties. This trend is likely to last a lot longer than most think so we would expect this concept of purchasing waterfront and recreational properties to be a strong trend in the coming years.
The devaluing US dollar compared to the Canadian dollar: This is really the main stay of why this article is written. American investors need good quality opportunities to diversify their currency holdings away from US dollars into other currency classes. The Canadian dollar is an excellent choice for the American investor. It is a "commodity based" currency (like the Australian dollar and the South African Rand). Also Canada's federal government is running a series of budget surpluses, rather than extreme deficits. This makes the Canadian dollar "valuable" in the eyes of foreign investors.
In summary, the overall value in Canadian Real Estate is still exceptional. This is some of the most beautiful country you will ever see. The investment value from a currency perspective is tremendous.
Please feel free to contact us and we would be happy to provide you with a current list of available properties.
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