With Vancouver and Toronto overpriced and taxing overseas property investors, Manitoba is starting to catch the eye of European investors.
Manitoba is Canada’s fifth-most populous province, with about 1.3 million residents. One of what are known as the Prairie Provinces (along with Alberta and Saskatchewan), it has had a stable housing market for the past decade, and that is expected to continue through 2020, according to the latest Manitoba housing market outlook report from the Canada Mortgage and Housing Corporation.
Manitoba has a very stable economy, so doesn’t tend to get the peaks and valleys that other parts of the country experience. Prices are level or slightly increasing year over year, with sales volume remaining steady.
The province relies heavily on agriculture, energy and tourism for revenue, and has until now attracted few overseas property investors. However, the province’s two major cities, Winnipeg and Brandon, are starting to catch the eye.
Lake areas with weekend and summer homes within a two-hour drive of Winnipeg are known as ‘cottage country’ and were sought after by Americans seeking cottages within driving distance in the Manitoba market until the global financial crisis of 2008.
Winnipeg is situated only about 60 miles north of the American border, making it an ideal base for those wanting to visit the USA.
These days, foreign buyers in Manitoba, who are largely concentrated in the cities, tend to come from Europe, the Middle East, India and South Africa.
Unlike Vancouver and Toronto, there are few restrictions on foreign buyers in Manitoba.
Mortgages from Canadian lenders are available to buyers from most, although not all, foreign countries, according to Nessa Werier, an agent with Royal LePage Dynamic Real Estate.
She said: ‘If they’re not working in Canada – i.e. recreational – they’ll require a 35 to 50 per cent down payment, depending on the situation. ‘If they’re working in Canada, then the percentage down is not as steep.’
Most foreign buyers hire a local lawyer, and a typical transaction costs between 500 and 1,000 Canadian dollars ($380 and $750), plus disbursements. Closing costs include a land-transfer tax, which is about 2 per cent of the sale price.
The agent’s commission may be 4 or 5 per cent, depending on the sale price, and is usually paid by the seller.
With property prices in Vancouver and Toronto still high, and the two cities still penalising overseas property investors with extra taxes on purchase, Manitoba could be a new way into the Canadian property market.