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China, UK, & US: How do their real estate markets differ from Canada’s?

China, UK, & US: How do their real estate markets differ from Canada’s?

Our world is becoming increasingly globalised. As a result, traditional employment for many people has become less reliable and more people are looking to other countries for opportunities.

A 2010 report by the Asia Pacific Foundation of Canada (the most recent date for which data is available) found there were 2.8 million Canadians living abroad, a higher population than exists in six of the country’s provinces. With so many Canadians deciding to live abroad we decided to look at some of the differences in real estate markets and processes in the world’s biggest markets.

Buying properties in different countries has a number of benefits. If you have the capital, it can be a good way to diversify and protect your investments. Richard Silver says it's both:

I think people who are high-net-worth like to have properties all over the world for a couple of reasons. Both for investment, but also to diversify their portfolio. I think they're often nervous about having all of their property and investments in one country.

Down South


Most Canadians who leave the country live in the United States. Luckily for anyone looking to buy property while living there, the processes are remarkably similar.

Canadians base their mortgages on a 25-30 year amortization rate, with the contract renegotiation every five years, adds Silver. Whereas in the United States, the mortgage lasts for 30 years without a renegotiation.

There's also a thing in the States where you can deduct your mortgage interest payments but you cannot in Canada.

Applying for a mortgage as a Canadian will likely be more tedious. To apply for and secure a mortgage in the U.S. can take up to 45 days. Still, buying property south of the border may be a good investment. Particularly when you look at data released by BMO last year showing Canadian homes were 41 percent more expensive than in the U.S.

Over the Pond


For anyone thinking about hopping the pond to the United Kingdom, it’s advised to do your homework as the process there is quite different.

As Silver points out, one of the biggest differences is that they don’t use a multiple listings system in the U.K.

If you're working with an agent in the United States and Canada, they can basically show you a whole myriad of properties that are listed with Sotheby's, they're listed with Royal Lepage, they're listed with Bosley. They're listed with all different companies. But then in the UK, if you see a sign you have to go to that agent. And if you want to buy that property you have to buy it through the agent.

Sherille Layton is originally from England, so she’s intimately aware of the differences between the two countries. Layton says on a recent trip to London, she and Richard gave some presentations on Toronto and the market there and the people at the London branch were impressed.

Layton calls the U.K. system "archaic" as she talks about the differences.

It's not as organized at all. Because the difference is, to do real estate there you don't pass any exams, you can just come out of school at 16, walk into an estate agency and get a job and then start showing houses.

The buying process is entirely different as well according to Layton. In Canada, a client usually needs to sign a ‘buyer representation agreement.’ When they find a house they want to put an offer on, they have to sign an ‘agreement of purchase and sale,’ which gives them a finite closing date.

In England, an agreement can be made verbally, which makes things much less clear.

So if you put an offer in and they accept it, one month later they can turn around and say someone else came and they're giving 5 thousand pounds more. You just never know when you're going to close until you close. It's crazy.

Richard Silver agrees with Sherille and adds how much more comfortable the process is in Canada thanks to formal agreements.

[In Canada], once you've signed an agreement a contract is a contract. But in the UK they have what they call ‘Gazumping'.

Gazumping is when the seller raises the contracted price of a property after having informally accepted a lower offer from a potential buyer.

Commission structure for agents is also very different. According to Layton, Agents in Britain think our commission structure is outrageous. The commission in Canada is often five percent, split between the selling agent and buying agent. In the UK, a seller will typically pay their agent 1 to 1.5 percent. Another difference, according to Layton, is that most salespeople are paid by salary.

Realtors in Canada are mostly on a hundred percent commission. They're "independent contractors".



China recently relaxed restrictions on foreigners buying property in the country. The move enables "qualified foreign institutional and individual investors to buy more properties on the Chinese mainland," according to ChinaDaily.com.

Previously, foreigners were restricted to buying one property in mainland China and needed to have worked or studied in the country for at least a year.

But as Richard Silver points out, no one actually owns property in the country.

The problem with China is the government owns the property, so you only get a leasehold. You don't actually buy the property. So even the property owners, as they call them, are really either a 50-year leaseholder or a 70-year leaseholder.

After the lease ends the property reverts back to government ownership.

In larger cities like Beijing and Shanghai, there are also limits on the number of properties an individual can buy. These were put in place to prevent wild speculation after an incident in 2009. A high-end property was launched in central Shanghai, bringing a wave of foreign investors. According to a report by Xinhua, one extended family purchased 48 units at one time. Properties are most sought after in gateway cities like Beijing and Shanghai, but these limits will put the brakes on speculation.

These new rules don’t mean it will necessarily be easier to buy property, though. The usual process is to pay for a property in full. Mortgages can be obtained by foreigners from Chinese banks, but the documentation process is more arduous. In order for a foreign buyer to qualify, you must:

  • Have worked or studied in the city you wish to buy in for at least one year.
  • Must have a Chinese sponsor who will guarantee you earn enough to repay the loan. Usually an employer.
  • Provide many documents for the approval process.

That said while buying property in China might be possible as a foreigner, in might not be a wise investment. As Silver points out, many people in China are parking their money elsewhere in the world.

You have to remember, China's a communist country. It's totally autocratic, So that's one of the reasons people would move their money out of China. Because they're nervous that the government can come in and just automatically change the rules.

Buying property in different countries can be a very effective way to diversify your investments. It also leaves you free to travel and can offer you extra income. But whether it’s a country like the United States–where the system is relatively similar to Canada–or a country like Britain or China–where the system can be much different–, it’s important to know the facts. 


International Real Estate: London is still London

International Real Estate: London is still London

From the United States to Great Britain, there is a lot of anxiety about the future and that kind of instability can have a strong impact on housing prices around the globe. While the situation South of the border is still too fresh to fully assess the situation, there is much talk of what will happen to real estate in Britain following the country’s decision to leave the European Union.

One recent forecast found that housing prices in the UK will rise between 1 per cent and 4 per cent in 2017, a sharp drawback from 2016 gains. The same forecast also pointed to a possible drop of housing prices in London.

Uncertain Times


In times like this, it’s not uncommon for homebuyers to look abroad for more stable options. Canada can often look like an attractive destination for people who want to park their money in a safe and secure economy. Brexit has created uncertainty in the UK, but whether it’s enough to draw people away from a city like London remains to be seen.

Simon Tollit doesn’t think it is.

Tollit, who is a Real Estate Professional in London, England with Sotheby’s International, says there’s more to the story.

It's creating uncertainty, but Brexit is not the reason why the UK and London are seeing a deteriorating property market. That's all down to down to Stamp Duty.

Stamp Duty Land Tax (SDLT) is a government tax home buyers must pay when buying a property. Tollit says if a person buys a property for 1.5 million pounds, they pay 12 per cent on the stamp value. So if the home sells for 10 million pounds–which isn’t unheard of in London–the buyer pays 12 per cent on the total between 1.5 million and 10 million pounds.

"So basically it's made it very, very expensive," said Tollit, who points out that in the last year the government also increased the Stamp tax on additional homes and investment properties a further 3 per cent. Tollit says that’s the main reason housing prices have fallen in London.

Sherille visited Sotheby's International Realty offices in London in December 2016. Simon Tollit is on the left.
Sherille visited Sotheby's International Realty offices in London in December 2016.

Looking Abroad

Sherille Layton was born in the UK but immigrated to Canada with her husband in 1999.

We came here on holiday and just fell in love with Toronto. We applied back then and got our visa within 3 months. In fact, we got our visa I think seven days before 9/11. Now it's taking people three years, so we were very lucky.

The newer visa restrictions may also make it harder for anyone thinking of moving to Canada. But Layton says she attended an immigration summit in December and saw some signs that people were moving here.

I was sitting next to an immigration lawyer and [they said] a lot of people are going through Quebec to get their visas because it's faster. So I think there's definitely a lot of eyes on Canada.

London Is Still London

Tollit has a hard time believing Brexit would be the impetus for anyone moving abroad.

I can't think of one person who said 'right, on the back of Brexit I'm selling. It might be one of many reasons why someone would sell, but it's not a defining reason.

Especially when it comes to international buyers, the appeal of living in London outweighs the potential drawbacks of a post-Brexit world. Some are [concerned about Brexit], but if you're looking for a long-term investment or you're looking for a home, you're going to spend time in London.

He says anyone with business in the city or country isn’t likely to be scared away by the changing political tide.

Guys who've got 5,10 million pounds to spend generally are pretty intelligent, switched-on people by the virtue of the fact they can spend 5, 10 million pounds on a property. So they're not stupid and they're guided by experts. So as long as properties are priced correctly there is still a market.

Sherille agrees, saying the rising cost of living will definitely have an impact on the housing market, but people will always want to live there. Just like the rising cost of living in Toronto is not driving away population, but attracting it.

I think probably the first part of the year people will just try and buy because they don't know what the future is going to be like. Although, anybody that I know still in the UK were quite shocked about the whole Brexit thing.

And while London may be seeing a bit of a dip, people are still buying throughout the country. In fact, another recent study from Halifax points out that the number of first-time buyers in the UK reached an all-time high in 2016.

Richard and Sherille in London during The Torontoism Team international trip in December 2016.
Richard and Sherille in London during The Torontoism Team international trip in December 2016.

Still Some Movement

That said, there does appear to be some movement. Whether that’s related to housing prices is hard to say, but Sherille says Toronto remains an attractive market for buyers.

If you look at the Toronto real estate market 2016 was another record year. The average price of a home was 730-thousand dollars. The market increased by 17 percent. And she expects 2017 to be quite similar.

There's a lot of turmoil in terms of the G8 countries. Who knows what's going to happen in the US. England's all over the place. France, Italy. We might look boring but we're pretty steady.

The Torontoism team recently joined the UK-Canada Chamber of Commerce, the 94-year-old non-governmental body that serves as an authority on trade and investment between the two countries. Sherille says they’re reporting a lot of movement between the UK and Canada.

There's been a lot of immigration lawyers becoming members of the Canada Chamber of Commerce, so that would also suggest there's going to be quite a bit of movement this way.

Can you keep up with the fast paced market?
Can you keep up with the fast paced market?

The Road Ahead For The UK

So while you may start hearing a few more English accents over the next few months and years, don’t expect bangers and mash to be added to the top of every menu in the city.

"London is still London," said Tollit.

It's still very much an economic powerhouse and we've still got the time zone, we've still got a good legal system, a fundamentally strong economy, the service sector's good, schools are good. So all of those factors are always going to play into people wanting to live there.

Tollit says Brexit does not signal a doom and gloom scenario for London. The market is simply pausing for breath. After all, the city’s real estate market has grown steadily for the last few years.

You can't have 10, 12 per cent growth year-on-year forever. It's just unsustainable. So it's a cycle we're going through. We've been here before and we'll come out the other side.