Canada, the land of immigrants, has welcomed hundreds of thousands of people and in recent times, there is a growing immigrant population from Asia.
In 2019 alone, the number of Canadian immigrants totaled over 300,000 and this isn’t surprising, seeing as Canada is the second largest country in the world, yet ranks as the 38th country in terms of population. However, while immigrants hope for an improvement in the quality of their lives with them moving into Canada, many of them are ill-prepared for life in Canada.
Planning your Move to Canada? Here are Five Things You Should Know
1. Housing Affordability Issue in Toronto and Vancouver
One in every three professional immigrants into Canada find reside in Toronto, and because of the high proportion of professionals in Toronto, the city has a sizzling real estate market to meet their rising housing demands.
However, because Vancouver’s weather is a bit milder than Toronto’s, a significant percentage of immigrants also reside in Vancouver. If you might be getting a job/ living in one of either cities, you should know that the price of an average property is about $1M. Future immigrants should check how much home they can afford to buy in Canada.
2. What’ve You Heard about the Weather in Canada? (Spoiler alert: it’s colder than you thought)
The thing is, you’ve probably heard that Canada is really cold. You might be shocked to realize that you have frequent mood changes as a result of Canada’s long winters & the sometimes unbearable cold weather. Good preparation is the key to navigate through these issues- and with regular exercise, paying attention to lighting in your home, and engaging in winter activities such as skiing, taking tropical vacations; you’d be able to cope during Canada’s long winter periods.
3. Is Buying a Used Car a Wise Choice? Yes, it is!
Unlike in a lot of Asian countries, there is a significant price difference between new and used cars in Canada and the US. Due to this, you’d be making a smart financial decision if you buy a 3 to 10 year old car instead of a new car which has both low mileage & no known historical problems, from a reputable car brand. For someone who’s just moving into Canada, the purchase or lease of a used car would save you a lot of money because of the price difference between used and new cars. Meanwhile, you could get similar benefits from buying a used car if you buy a good car brand such as Honda or Toyota. More so, as soon as you drive a new car off the lot, it begins to rapidly depreciate, and the value drops by as much as 25% within the first year of purchase, and a further annual rate of 10% over the next 5-10 years. Save yourself this disappointment by buying a good used car.
4. Building a Good Credit Score is Essential
Settling into a financially comfortable life in Canada is rarely possible without having a good credit score. Whatever you might be needing a loan for: to get a mortgage, an insurance policy or even a credit card, lenders typically assess your creditworthiness by checking your credit score and credit history. To score ranges from 300-900, and a score of above 750 is often favorable. To bring your credit score closer to 800, you should avoid late payment on credit cards, have a credit utilization rate of less than 30%, maintain a good credit history and try to limit credit inquiries on your account. This way, if you need to secure a mortgage on a house you plan to buy, low rate mortgage options will be readily available to you by good lenders.
5. To Build Your Retirement Income, Invest in RRSPs & Rental Properties
It’s never too soon to consider building your retirement income and the best way to build this is to start from the first 1-3 years after immigration into Canada. Apart from regular pension plans, you can build a solid retirement income by investing in a Registered Retirement Savings Plan (RRSP) which helps accumulate income towards retirement while shielding you from heavy taxation. You can have a healthy mix of financial products in this account e.g. mutual funds, bonds, treasury bills, & guaranteed investment certificates (GIC) in this savings-investment portfolio, and you can contribute to this account till the end of your 71st year after which it is converted into a Registered Retirement Income Fund (RRIF) or lifetime annuity.
Also there is a Home Buyers’ Plan targeted towards helping first-time home buyers to buy a house, and this plan allows you to take up to $35,000 out of your RRSP to buy a house. As a newcomer into Canada, you can take advantage of this amazing opportunity to build both retirement savings & invest in real estate .
Living in Canada would be easier if you are already prepared to utilize the benefits offered such as getting a loan after diligently building your credit score, saving on taxes with an RRSP, buying a property with the aid of home buyer incentives, and getting a functional used car, as opposed to a new one. Also, properly managing negatives such as brutally cold weather with tips like regular exercise and adequate use of lights to brighten your home; would help you enjoy your new life. Welcome!