Foreign investors bought properties in Canmore for what appeared to them as extremely cheap prices.? Unfortunately, because of the high value of their currency, these investors were also willing to pay higher than market value prices for properties because they were still getting a great deal compared to property values in their native countries.? Though overall prices were driven up in Canmore as a result, it?s important to note that this was chiefly caused by foreign investors who only represented 10% of home buyers.? Native Albertans were the biggest buyers in Canmore, but the 10% foreign buyers were responsible for driving up the prices of homes without any economic basis.
However, in 2007 the UK?s economy began to slide.? Canmore stared losing UK buyers, and sales dropped off in the area considerably.? But Canmore property priced stayed stable until the end of summer 2008 due to the oil and gas companies activity in the area which provided plenty of high paying jobs.? Then in October 2008 the US economy crashed.? Not only did Canmore lose US buyers, but people in general lost confidence in the economy.? A slump then occurred in Canmore?s real estate market and many people feared losing their jobs and consequently their properties.? By 2009 Canmore property prices dropped by 20%.? Between July 2008 and June 2009 Canmore had a very quiet real estate market, only selling a third of the properties that were sold at the market?s peak.
By 2010, the Canmore real estate market was adjusting to fewer sales and catering mostly to Alberta residents.? By spring 2011 the new listings for single family homes were lower than they had been in 2008 ? 56 vs. 76 respectively.? This was definitely positive news for Canmore?s single family home market but during this same time condo builers were lowering their prices and marketing intensively to sell what was left in their inventory.? This was the residual impact that foreign investors had brought about and then left behind.
Strategic investors recognize the new buying opportunities in Canmore created by the departure of foreign investors.
The Market Influencers That Affect The Real Estate Cycle Part 10
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