The federal government has launched a new pilot program that started this month in aiming for fewer but richer immigrants. The Canadian government will give permanent resident status to 50 experienced millionaire investors with high net-worth in their aim to continue economic growth and prosperity. Under this pilot program, each investor will be required to have a net worth of $10 million and make a non-guaranteed investment of $2 million over 15 years. The said funds will be invested in innovative Canadian -based-start-ups with high growth potential. Applicants should prove proficiency in English or French, with post secondary education, demonstrate the net worth of at least $10 million was obtained from lawful profit-making business. Minister James Moore mentioned that the pilot program is part of Canada's efforts to attract experienced business leaders to Canada while leveraging their business expertise and personal investments.
The previous immigrant investor program required applicants a minimum of $1.6 million to loan Canada $800,000 5 years interest free. This program revealed that the net gain to Canada averaged to only $20,000 per applicant as it was invested in a low-yield stock bonds. A total of 36,973 investor immigrants flocked in BC from 2005-2012 under this program and two-thirds of these applicants were mainland Chinese who said they planned to live in British Columbia.
Homes worth over $1 million have been selling at an increased rate in a year-over-year report by Sotheby’s. Growth in Vancouver (25%) and Toronto (38%) is expected to continue into 2015, whereas growth in Calgary (16%) and Montreal (21%) is expected to be balanced. Sotheby’s is closely watching Calgary and how the severe drop in oil prices will impact its luxury homes market. Calgary may experience a slow down in purchases, as seen in the tail end of 2014, because buyers are being more cautious. Despite a recent CHMC report stating low foreign ownership numbers in Vancouver and Toronto, Sotheby’s said that half of homes worth $5 million or more are owned by foreign investors. This discrepancy is because foreign purchases are transacted through Canadian subcompanies, however Sotheby’s is unable to give hard numbers. CMHC data wouldn’t capture these corporate transactions, whereas Sotheby’s familiarity in the luxury homes market places it in a better position to gauge the level of foreign ownership. Some critic mentioned concern about the stability of this market, in case these foreign owners suddenly selloff their high-value properties, causing a crash in Canada’s real estate market. However, Sotheby’s says that historically low mortgage rates and high levels of immigration continue to make Canadian real estate attractive overseas.
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