There are many ways that the political climate can affect the real estate investment market. Inflation, rising gas prices, and even the price of There are many ways that the political climate can affect the real estate investment market. Inflation, rising gas prices, and even the price of construction materials can affect the success of your real estate portfolio and can give investors a reason to be nervous.
Canada’s sustained lack of volatility will make you breathe a sigh of relief.
On a list of 194 countries, Canada was ranked the 35th most stable country in 2021.
How can anyone predict the likelihood of a country being overthrown? Is it possible to look into a crystal ball and know if your country will be the target of political violence and terrorism?
Turns out you can forecast those things. The Index of Political Stability and Absence of Violence/Terrorism compiles data from the Economic Intelligence Unit, The World Economic Forum, and the Political Risk Services. Based on that data, each country is given a yearly score between the value of -2.5 (very weak) to +2.5 (which is strong).
Between 1996 to 2021, Canada’s average score was 1.07. Canada’s lowest score was 0.83 points in 2005, and the highest was 1.27 points in 2015.
Compared to 194 countries, Canada was 35th. Liechtenstein was at the top of the list, with 1.64 points, and Syria and Somalia were at the bottom, with -2.68 points.
Recognizing and addressing minor issues before they become a crisis.
Canada has a lot going for it. It has a thriving and robust economy and natural resources, and they are a world leader with a free democracy.
And so, foreign states have attempted to advance their national interests by targeting Canada, particularly during elections. These threats continue to become more frequent and sophisticated, yet they are unsuccessful
For instance, foreign interests have used social media to spread disinformation or run campaigns designed to interfere with healthy public debate by confusing and dividing the public’s opinions.
Even though those challenges exist, Canadians weren’t threatened by violence, didn’t have civilians displaced by war, and weren’t in the throes of a humanitarian crisis.
In fact, Canada is usually in a position to take in refugees and people who are escaping political turmoil.
Studies show that political stability and a healthy economy are linked.
Common sense tells you that you need stability to build and grow, and it is impossible to thrive while things are being destroyed. A Harvard study by Alberto Alesina, Sule Ozler, Nouriel Roubini, and Phillip Swagel confirmed the deep connection between political stability and economic growth. The researchers studied 113 countries to compare political instability with per capita GDP growth. Interestingly, the relationship goes both ways because poor economic performance can lead to political unrest.
Canada’s stable political climate supports and reinforces the real estate market. The likelihood of losing a home to violence or terrorism is very low. The peaceful and welcoming culture is attractive to international students and immigrants.
BG Wealth Group operates real estate investment programs in Canada and plans to expand further into the United States in the coming year. Click here to schedule a 1:1 and learn more.
