Canadian Funding Corp. Discusses CMHC Awards» USA http://canadian-funding-corp-awards.com CMHC Awards Reviewed by Canadian Funding Corp. Tue, 15 Jun 2010 20:49:44 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Right Time to Invest in Mexico Real Estate http://canadian-funding-corp-awards.com/2009/07/09/right-time-to-invest-in-mexico-real-estate/ http://canadian-funding-corp-awards.com/2009/07/09/right-time-to-invest-in-mexico-real-estate/#comments Thu, 09 Jul 2009 14:52:36 +0000 admin http://canadian-funding-corp-awards.com/?p=136 Herb C. Jahnke asked:

There has been fervent discussion about the impact of US recession on Mexico Real Estate and its future prospects. When talking about Mexican Property market, it may seem that it is closely related to the US real estate. Some may very well paint a gloomy picture for Mexico Real Estate market. But an in depth study of Mexico Real Estate will reveal a bright future for Mexican Real Estate in the coming year.

The real estate in Mexico has witnessed steady appreciation in the last 5 years. Both, homes and condos in Mexico, new and resale have contributed to this growth. The real estate market in Mexico is usually popular with American citizens who look for a second home or vacation home in Mexico. The reasons for this popularity have been its close proximity to USA, low cost of living, better value for money and a warm sunny climate. Recent years have seen thousands of American expatriates buying retirement homes in Mexico. Moreover, infrastructure in Mexico has improved to international standards. This has made Mexico a much sought after destination.

You may very well ask why Mexican Real Estate industry won’t suffer as a consequence of the recent fall of US economy.

Destination like Cancun, Playa del Carmen, Puerto Vallarta , Baja California region are very popular with real estate investors in Mexico. These areas are continually seeing new and grand real estate projects conceived and completed to meet the demands of the buyers eager to buy real estate in Mexico. With the introduction of Mortgage financing for foreign real estate investors in Mexico, the increase of foreign investment has strengthened the growth of real estate market in Mexico. Since, the lending process and criterion for foreign real estate investors has been simplified, it has served in increasing enthusiasm for Mexico real estate.

Mexico real estate market is much more stable than US real estate market. The residential mortgage backed securities, popular in the US property market, are not common in Mexico, so have a much less effect of the sub prime crisis afflicting US economy.

Another factor is that the buying market who are looking for the second vacation home is not really experiencing too much of the current recessionary effects in America.

One very interesting development seen in Mexican real estate market is the increase in real estate investors from Canada. Canada has experienced a very strong dollar in recent times. Strong economy and increased property markets, especially in the main areas of Toronto and Vancouver , have led to a large number of Canadian home owners able to spend money on a second or Vacation Homes in Mexico.

Mexican real estate market seems to be a promising and steady destination for investors throughout the coming years. Recessionary influences of the US have not shown any medium to long term negative impact so far on Mexico Property Market. Foreign investors from Canada and Europe are flocking to Mexico compensating for any dwindling of investment from USA. So go ahead and buy your dream vacation home in Mexico and secure your investment for the future.

Author: Insight Advisors

http://pcmexico.org/right-time-to-invest-in-mexico-real-estate/

reviewed by Moishe Alexander, CFC  canadian funding corp CEO

]]> http://canadian-funding-corp-awards.com/2009/07/09/right-time-to-invest-in-mexico-real-estate/feed/ 0 Real estate prices mystery solved http://canadian-funding-corp-awards.com/2009/06/26/real-estate-prices-mystery-solved/ http://canadian-funding-corp-awards.com/2009/06/26/real-estate-prices-mystery-solved/#comments Fri, 26 Jun 2009 20:49:46 +0000 admin http://canadian-funding-corp-awards.com/?p=112 Have you ever thought about the reasons for the changes in property prices? In the following article, I will try explain the main factors behind the property prices’ shifts. This knowledge has been gained from over two decades working as a Toronto realtor.


Following the trend
How to calculate the next price move? How does one determine when it is best to invest? What majority buyers do is they simply watch for the previous direction of prices. In other words, their expectations are mostly affected by the previous movement. If the prices rise they expect the growth to continue, and vice versa. Although such a strategy does not consider the real factors that have an impact on the price, it is applied. Relying on this method alone can produce very painful experiences, just as we saw not too long ago. (picture by kevinzhengli)

Fundamental economic factors

What economic factors have the most significant impact on how prices are formed?
- Economic growth
- Nominal interest rates (before inflation) and structure of mortgage products
- Inflation
Let’s look at these factors in more detail.

Economic growth

The stronger the state of economics, the better it is for business as well as for real estate. One of the reasons is that when economics is stronger it raises property prices because the buyer gets reassured that there will be a rise in the demand for housing, and a rise in the value of his property which will enable him to sell it again for a profit. In accordance with BIS Quarterly Review, 1% of GNP increase is connected with 1% to 4% property price rise after 3 years.

Nominal interest rates and structure of mortgage products

In order that property prices grow, the very first thing needed is eager buyers. One implication of the fact that house lones have to be made when anyone wants to buy property, is that there will be many buyers who will go rather for houses with interesting mortgage products that includes low nominal rates. According to the mentioned source, a 1% drop in the nominal interest rate can be linked with 1/2% to 1% rise in property prices after 1 year. Equally, the buyers seem to be very sensitive to even a slight rise of nominal interest rates, causing the property prices to settle. But there are exceptions to the rule. For instance – a credit crunch occurs when official interest rates become of less importance and the loan market gets driven by different factors. Likewise is the real estate market.

Inflation

Property prices are strongly impacted by the rate of interest while changes in interest rates are influced by inflation. High inflation has a varied impact in different countries. Some countries see investing into property as balancing inflation in which case higher inflation will result in a rise of property prices (for instance Germany). Such countries may be characterized with fixed interest rate loans with no equity withdrawal. Although, high inflation will have a bad impact on property prices in countries where interest rates are floating, as in the UK, or with equity withdrawal as in the USA.

Conclusion

As with most rules there are exceptions and numbers and values do not always have to apply to your area. It is realtor’s business to see the exceptions and differences. However, it is important to note that a general system is used by means of which real estate prices are created on the market. Don’t let shallow attitude get thebetter of you. Think about every aspect of the market.

reviewed by Moishe Alexander, CFC CEO
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