You know that international buyers are important, but are they important enough to warrant an agent’s investment of serious time and effort?
If you believe Statistics Canada, you might think so. The official Canadian authority on data issued a report showing that owners who live in other countries hold $37.37 billion worth of property in the Toronto area alone.
Buildings constructed after 2016 have about twice the non-resident ownership rate as older buildings. This implies that a large amount of foreign buying has taken place in the past half-decade.
To be clear, not all non-residents are foreigners. Some are Canadians who live overseas and still own a property back home. Still, the Statistics Canada data is the best we have on foreign residential ownership.
Other data highlights the situation from another angle. Juwai IQI’s Top 10 Asian Buyer Picks for 2020 report revealed that Canada is the fourth most-popular destination for Asian cross-border buyers overall.
For buyers from certain locations, Canada ranks even better. Buyers in Hong Kong and Macau, China; Singapore; Japan; The Philippines; South Korea and Laos rank Canada in their top three.
Overseas buyers’ romance with Canada has become even hotter recently. Foreign buyers are eager to gain from fast-growing property prices and fear having to pay more if they postpone their purchase.
I know of a student from India who is studying in Canada and hopes to remain to work after she finishes her advanced degree. She was planning to wait a few years before buying her first Canadian home, but given the super-hot market, she fears that the prices will be too high by then. Instead, she has borrowed money from her family to purchase a condo in the first half of 2021.
As Ottawa’s parliamentary secretary for housing, MP Adam Vaughan recently pointed out that Canada has become “a very safe market for foreign investment.” To many buyers, it looks more attractive than the alternatives. And while some blame foreign speculators for pushing up housing prices, in reality most foreign buyers are purchasing for their own use. The government is hoping to attract 1.2 million migrants over the next three years. They will have to live somewhere.
How do I court buyers from overseas?
I think it’s worthwhile courting foreign buyers. Here is some advice on how to do it.
1. Sell both product and lifestyle.
When marketing to foreign buyers, value and potential returns are important. But remember that many buyers expect to occupy the property they are buying. So, do not overlook lifestyle.
Depending on their culture, they might prefer high-end fixtures and finishes. You can benefit by successfully emphasizing the most appealing aspects of your listings to the foreign buyers most likely to be active in your market.
2. Market in the buyers’ preferred language.
Many foreign buyers are different than locals in one important respect: English is not their native tongue. One of the first steps you can take is to localize your marketing materials, which at its simplest means translating them. Do this yourself if you have the expertise. It is also inexpensive to find a freelancer who speaks the relevant language. It need not cost much but can make a big impact.
You don’t need to speak any foreign languages to be successful with buyers from non-English speaking countries. But never use Google Translate alone for your content. Make sure someone who is a competent speaker reviews it first.
3. Follow the money.
The famous American bank robber Willie Sutton, when asked why he robbed banks, reportedly said, “Because that’s where the money is.” (Sutton also said he carried a machine gun because you can’t rob a bank on charm and personality.)
Which foreign buyers have the most potential for your market? Helping foreign buyers has grown to account for significant share of our business at IQI Canada. There is no reason it can’t be just as profitable for you.
Yousaf Iqbal is director IQI Canada, the Canadian arm of real estate technology group Juwai IQI.
