Last Updated on 14/09/2023
Canada is one of the most attractive destinations for foreign investors around the world. However, it just launched a new law pertaining to foreigners’ ability to participate in the Canadian real estate market, which became effective on January 1st, 2023. This decision made many nationals wonder about the reasons behind this ban and encourage them to seek new investment substitutes.
Keep reading to know more information.
Canadian real estate market: A ban on foreign home buyers
To slow down the rapidly rising prices in the Canadian real estate market, the Canadian government introduced on January 1, 2023, a new law that effectively forbids foreign investors from investing in residential properties for two years. This ban that has entered into force since the beginning of January 2023 through Prohibition on the Purchase of Residential Property by Non-Canadians Act will last until 2025.
This regulation does not include foreign permanent residents in Canada. Moreover, it only involves residential property located in census-designated metropolitan areas or agglomerations.
In case of violation of the ban, a $10,000 fine and the potential sale of the offending property await the responsible individuals.
Intentions behind the Canadian ban on foreign home buyers
The Canadian authorities have been convinced that foreign buyers drove up house prices by owning most of the homes, but a closer look at the data reveals otherwise. The Canadian government declared that the objective of the ban is to slow down the rapid prices increase in the Canadian real estate market. Therefore, it aims mainly to make housing more accessible and affordable in terms of prices. Although there is an issue in housing affordability, figures reveal that less than 6% of foreigners own homes in Canada’s major cities, such as Toronto and Vancouver.
Experts’ viewpoints: How will this ban affect the Canadian real estate market
Since the ban recently went into force, it’s too soon to tell if the new regulation will meet its goal. Yet, real estate experts doubt it will have an important influence on property prices since non-Canadian purchasers account for such a small portion of all home market transactions and it doesn’t exceed 6%. In addition, experts believe that it would be more effective to adopt other strategies that might solve the issue of housing supply and prices in the Canadian real estate market. This includes for instance boosting the supply by building more homes and putting a stop to house flippers.
Turkish real estate market a profitable alternative for Canada
Foreign investors who seek a substitute for the Canadian real estate market should be aware of the profitable opportunities in the Turkish market. In fact, Real estate investment in Turkey presents a wide range of benefits and advantages that keep attracting international investors from all around the world.
The number of properties sold to foreigners increased to 67,490 in 2022, up 15.2% from the previous year. This indicates that foreign purchasers accounted for 4.5% of all house sales in Turkey. Istanbul led the way with 24953 sales to overseas customers in 2022
Advantages of real estate investment in Turkey
An active and strong real estate market
The real estate market stands as one of the most promising and advantageous real estate markets in the world, Turkey offers a wide range of alternatives for international investors, including luxury apartments, villas, and commercial real estate. Moreover, despite the fluctuation of the Turkish currency, the Turkish economy remains strong and stable which makes real estate investment secure and safe. Moreover, the Turkish real estate market is an active sector thanks to continuing need for housing due to the young and expanding population. Consequently, as the industry expands, there are several chances to raise funds.
For a better vision, we suggest you take a look at the forecast of the Turkish real estate market in 2023.
VAT exemption for foreigners
The low annual property tax is another benefit of the Turkish real estate market. It constitutes only 0.2% per year from the property value. Moreover, foreign buyers are likely to get VAT exemption under certain circumstances while buying a property in Turkey.
More affordable real estate prices
In comparison to other western countries, real estate prices in Turkey are still quite affordable. For example, according to numbeo.com, the m2 sales price in the city center of Toronto is about 9600$ while it is about 3000$ in the center of Istanbul.
Lower Cost of living
Compared to Canada the cost of living in Turkey is much more affordable. In fact, Canada’s consumer prices are 128.0% more expensive than in Turkey. Similarly, Restaurant prices in Canada are 216.9% higher than those in Turkey while groceries cost is also 167.2% more expensive than in Turkey.
Turkish Citizenship by real estate Investment
The Turkish Citizenship by Real Estate Investment program offers a variety of choices. One must invest at least $400,000 in one or more properties of any type in Turkey to be eligible for Turkish citizenship. This enables you to obtain a Turkish passport through real estate in a quick procedure that takes no more than two to four months. Additionally, you will have complete freedom to live, study, and work in Turkey.
You can take a look at the 2023 updated guide for Turkish Citizenship by real estate investment or get risk-free consultation for further information.
You can also evaluate the Turkish Citizenship investment scheme compared to other international investment programs.
If you are interested in investing in the Turkish real estate market, MEO Consultants experts will provide you with a complete advisory to help you find the most profitable investment scheme. Don’t hesitate to contact us.
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