Canada next on us hit-list?

The U.S. crisis has not yet affected Canada, but how long will that last…?

The Canadian dollar has had its strongest performance in years. From a record low of 62 cents on the U.S. dollar in January 2002, the currency now matches the greenback in value. And the second-home housing market at the high end, in places like Victoria on Vancouver Island and Chester, Nova Scotia, is flourishing.

Who's buying? Along with affluent Americans unaffected by the recession, Europeans looking for more remote luxury destinations are also finding second homes in Canada. U.K.-based real estate firm Knight Frank is even in the midst of developing a property in Whistler, British Columbia, to attract skiers from across the pond.

Canada buyers will act ‘frugally’

Elton Ash, executive vice president with RE/MAX Western Canada, was cautious about the future: “Troubles across the border are bound to affect Canada's market within the next year. Soon enough, Canadian buyers--many of whom work for companies based in the United States--will begin to act more frugally. The two economies are too closely related for there to be no Canadian downturn whatsoever.

Even if Canada does suffer a downturn, Ash doesn’t think that the luxury market will suffer.  He explained: "It's a separate market that drives itself, and right now, demand for high-end real estate--especially lakeshore property--is huge."