Canadian investors should be paying attention to these money trends if they want to capitalize on the best investment opportunities in today’s market.
There is a lot of change happening, as big moves take place within the stock markets and energy sector. Although there have been talks of the possibility of major trade and tax changes in the foreseeable future, the following are the top 3 money trends Canadian Investors should be paying attention to, as they could play a major role in future asset values and performance.
- Surging Foreign Investment
New data shows that foreign capital invested in Canadian commercial property rose 33% last year. This record-breaking volume of investment capital deployed into Canadian retail, office and hotel property topped the previous high in 2007.
Last year’s high of $34.7B could be surpassed again this year due to a variety of local and international factors. Mortgage Broker News predicts that the Fintech economy of BC could be a major driving factor in 2017 with markets like Alberta improving after being impacted by energy industry issues over the last couple years.
- The Airbnb Crackdown
Although Airbnb recently made a major play to buy a Canadian property management firm, there are still looming issues for homeowners and property investors seeking to cash in on short term residential rentals.
One Justice of the Peace in Canada recently made a huge example out of one property owner by levying a $10,000 fine for using Airbnb type platforms. In Florida, these fines can be as much as $10,000 per day. Neighbors and local governments are not about to stand by and put up with this activity. Investors should be wary of relying on this type of strategy for producing consistent rental income, as many may begin converting their holdings to commercial property investments to avoid the regulatory hassles.
- Inheritance Funds
The CIBC expects a new round of generational wealth transfers will impact the savings market and real estate industry. RBC estimates we are facing the largest transfer of wealth in Canadian history, with around $400B set to change hands. Yet, just 22% of high net worth Canadians reported that they have a succession plan, while 60% of Canadian parents said they didn’t trust the next generation with the ability to grow or protect their money, and 63% don’t even feel comfortable talking to their kids about inheritance plans.
There are numerous money trends in motion right now. Among them are a fragile short term residential rental marketplace, growing foreign investment in Canadian commercial real estate, and a massive shift in who controls and directs wealth. Those who can perceive what impact these trends will have on asset values and performance can make very smart money moves of their own beginning today.