Last week Britain's vote to leave the European Union plunged governments worldwide into a pit of economic and political uncertainty. The ripples of the referendum will have an unmistakable impact on global economies and, by association, on global real estate markets. But only temporarily sources say.
Interest rates hitting new lows
BMO chief economist Douglas Porter and senior economist Robert Kavcic in a report last week said "The immediate impact of the post-Brexit vote on Canada’s economy will be pressure to keep interest rates at historically low levels. This is, in part, because other segments of our country’s economy would feel the impact of the Brexit fall-out, such as the nearly $16 billion in products we export to the U.K."
Fewer Brits expected to travel to Canada
Last year 725,000 Brits travelled to Canada, however, with the uncertainty of the British pound and Euro we expect a large percent to rethink their vacation destinsations.
“That doesn’t mean Canadians with vacation rentals should expect a loss in income, as the uncertainty in Europe has certainly helped the U.S. dollar and that could mean more visitations from our neighbours down south.” Explains Walter Melanson, founder and lead analyst at PropertyGuys.com.
Temporary declines a great time to invest?
The uncertainty caused by the Brexit vote could also cool the British property market—a market that has been notoriously popular for foreign investors from around the globe. “Foreign investors may see this as another example of buying a good investment as a cheaper price,” says Melanson. “Much like the speculators who bought when the U.S. housing market took a 50% dive, this same style of buyer may see this as an opportunity to get into the London market.”
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