Canada enters recession as luxury property booms

Photo: Abdallahh

Canada has officially entered recession this week, as new figures reveal the economy has contracted for two consecutive quarters.

Canada has officially entered recession this week, as new figures reveal the economy has contracted for two consecutive quarters. Data from Statistics Canada show that the country's economy contracted 0.5 per cent in the three months to June 2015, following a contraction of 0.5 per cent in the first three months of the year.

The recession has been attributed to falling oil prices and arrives on the heels of China's economic slowdown and ahead of the October elections that will see Conservative Prime Minister Stephen Harper fighting for re-election. Harper has already pledged to take measures to combat concerns about foreign ownership of Canadian property should he stay in office.

Indeed, while the economic outlook may seem gloomy, Canada's luxury property market is booming, thanks to strong overseas interest.

More than 570 homes worth over $3 million sold in Vancouver in the first seven months of 2015, according to a new report from Re/Max, with the most expensive home selling for $17.5 million - almost $1 million over the record set last year.

"What we’re hearing from our brokers and realtors is that when people are thinking of moving out of their country, whether that country is China, or Russia, or parts of the Middle East, more and more they’re looking to Canada as a place to said Gurinder Sandhu, Re/Max’s executive vice-president for Ontario and Atlantic Canada, tells the Globe and Mail.

However, not all are buying as an investment, but plan to relocate with their families.

"These aren’t investments they’re making from afar," Sandhu adds. "These are families that are moving to Canada and buying these luxury properties to live in and raise their families."