The UK’s flip-flopping on visas for wealthy investors could be great news for Canada and Canadian property investors.
London has long been one of the top magnets for wealthy international investors and their capital. Much of it landing in the city’s property market. That could change quickly.
In early December 2018, the British government announced it had suspended its ‘Golden Visa’ program that provides residency to those willing to invest sizable amounts of capital in the UK. The news apparently even caused notable celebrities like Chelsea FC’s Roman Abramovich to withdraw his visa application. Thousands of these visas can be issued each year. Investors can fast-track their residency status by investing larger amounts, ranging from 2 million to 10 million pounds.
Concerns over a high percentage of Chinese and Russian visa holders and international money laundering prompted the snap suspension. Just days later the government said it would not suspend the program, but will be digging into the data, sources of wealthy and character of investors, and declaring new changes to the program in 2019.
This has clearly created a lot of uncertainty over the ability to invest and stay in the UK for the global wealthy. This is all on top of the cloudiness over the Brexit. If you’ve been to London recently you probably have seen the dense cloud of cranes hovering the city. Perhaps even far more construction cranes than in New York and Miami where there already appears to be a glut of supply. New York’s market is already faltering as a result, with some of the top builders desperately trying to cut deals on portfolios of over 1,000 condos they have been unable to sell. If history repeats itself, London will probably be the next to be impacted.
This could all be great news for the Canadian market. Not many savvy individuals want to plough 10 million pounds into a potentially declining investment, with no guarantee of the safety of their investment. This could bring a windfall of capital to Canada.
Furthermore, next to the US and London, Canada is the top choice for safe property investments. That money may go into businesses as well, but often to be filtered down to be invested in commercial real estate. This would provide a nice lift to demand and values, elevating the returns of those currently investing in the market.
There could be some substantial changes in capital flows between now and mid 2019. London’s Brexit and visa woes could drive a lot of that money to Canadian property. Find out how ReDev Properties has been investing in Canada today, and what types of deals could be ripe to benefit from this activity.