Dubai: Canada’s property market may have stepped back a bit from its overheated levels, but that will not give Gulf-based investors cold comfort. Because the cooling off has come about at their expense and that of other foreign buyers wanting to acquire realty assets in Canada. This was brought on by direct market intervention in the form of higher stamp duty, as was the case in Vancouver and one of the popular hotspots for real estate investments among overseas buyers. It was last August that Vancouver imposed a steep 15 per cent on foreign investment for property purchases. The stated aim was to level the playing field for prospective domestic buyers, who were finding the hike in values putting homes beyond their reach.

Since the start of the year, foreign buyer led investments have been tailing off, and helping cool down property values from super-charged highs. The process is still on, according to Canadian property market observers.

“The authorities in Hong Kong, London and Australia had already made strong interventions in the property market to cool down property prices,” said an official with a property brokerage firm in Dubai. “The best way to do so was make it more expensive for foreign buyers, both to buy and hold these assets.

“Vancouver had to follow because there were rising instances of properties lying vacant after being snapped up by foreign buyers for investment purposes. It had become difficult for the authorities not to as it would have consequences for them politically.”

There is a common thread running through all of these events. First came the Chinese wave of investments into Australia and Canada and in the case of Hong Kong. The buy-them-all-up mentality of these buyers meant that a property only had to be listed for an hour or less before they got snapped up. And these were principally upfront all-cash transactions. With that kind of buying power, domestic buyers, especially those wanting to get in for the first time or trade up, never stood a chance.

“But the higher stamp duty in places like Vancouver will make it difficult for those UAE-based expats wanting to migrate to Canada,” said the estate agent. “Apart from the spike in values, the US dollar-Canadian dollar exchange rate does not offer much benefit for UAE based expats, unlike the dollar-pound, dollar-rupee situation.” (A US dollar currently fetches 1.3 Canadian.)

Interestingly, the strength of the Canadian currency in recent times have made its cities a more expensive place to be for expat professionals. In Mercer’s latest cost of living rankings, Vancouver shot up 35 places from last year to be placed 107th.

It thus overtook Toronto (at 119) to be the most expensive Canadian city in the ranking, followed by Montreal (129) and Calgary (143). Ranking 152, Ottawa is the least expensive city in Canada.

“The Canadian dollar has appreciated in value triggering the major jumps in this year’s ranking,” said the Mercer report.