It came as a shock to many when on June 23, 2016 the United Kingdom voted to leave the European Union, 52% to 48%. The leave vote has resulted in financial turmoil in the United Kingdom, with ripple effects being felt through Europe, Asia Pacific and North America. The British Pound dropped to a 35-year low, the commercial property market in the UK began to crash and global businesses announced they would be moving their headquarters outside of the UK to other European cities. As the United Kingdom begins the lengthy process of removing itself from the EU, analysts are now considering what the impact of Brexit will be on the global economy. Here we look at the predictions for the Whistler Real Estate Market and the rest of BC.
Lower Interest Rates for Longer
With already record low interest rates, experts are predicting that the uncertainty surrounding Brexit will keep rates low across the US and Canada for the next little while at least. With a real estate market in BC that is already white-hot lower interest rates will make borrowing even more affordable. This is likely to sustain the strong real estate market in BC as people take advantage of cheap financing for commercial and residential mortgage loans.
Perceived Investment Stability
In the wake of Brexit, the UK is no longer viewed as a safe place for real estate investment- specifically for commercial real estate. Already more than £1 billion has been wiped from UK property funds as investors withdraw their money, looking for stable investment opportunities outside of the UK. In light of the referendum results, B.C. is a stable and lucrative market for investing foreign capital and it’s likely to see investors choosing Vancouver and Toronto as real estate safe havens for commercial real estate specifically.
How will this effect Whistler?
Since the majority of the impact from Brexit will be felt within the commercial real estate sector, much of the impact will not be directly felt in Whistler. Whistler will continue to enjoy the heated real estate market and will certainly benefit from continued low interest rates. The Tourism Industry in Whistler could be effected by the referendum vote as less UK travellers are expected to go abroad due to their weakening pound and economic instability. The UK is the third largest source of visitors in BC making up 3.5% of the international inbound tourism market, and is a very important market here in Whistler. The reduction of UK visitors will certainly be noticed by the Resort Municipality of Whistler however with recent record-breaking tourist numbers any reduction in UK visitors will likely be replaced by other market segments.
The decision of the UK to leave the EU is likely to impact the real estate market in BC with the flow on effects such as sustained low interest rates, surely be felt here in Whistler. Commercial real estate is expected to receive the biggest boost from Brexit in the short-term as foreign investors look to countries like Canada as a safe-haven for foreign capital. The tourism market in Whistler will likely see a reduction of UK visitors due to economic instability in the UK, however overall visitor numbers shouldn’t be impacted as tourism in Whistler is showing record-breaking numbers, and other market segments should make up any loss in UK visitors.
Need more information on the Whistler Real Estate market and how it’s effected by global events such as Brexit? Contact Dave Burch today, your Whistler Real Estate Expert.