Canadians continue to purchase US property and be among the major buyers of residential real estate in the United States.
In fact, Canadians bought as many homes south of the border as the Chinese. But typically at a lower price point. That meant that while Chinese buyers bought U$13.4 billion of US homes, Canadians spent $8 billion.
The figures from the National Association of Realtors reveal that overall foreign investment in US existing homes was $77.9 billion. This was from April 2018 to March 2019, 36% below the previous 12-month period. Even though there was a decrease in sales. Canadians were still most likely to be cash buyers (76%), as they are also more likely to be a non-resident.
“A confluence of many factors – slower economic growth abroad, tighter capital controls in China, a stronger U.S. dollar and a low inventory of homes for sale – contributed to the pullback of foreign buyers,” said Lawrence Yun, NAR chief economist. “However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.”
Notably the exchange rate slowed Canadian's from purchasing as much as they have in prior years. However, the Canadian economy is still volitile and expensive so many Canadians continue to buy US property. This provides a more diverse real estate portfolio and in some cases, an escape from the cold Canadian winters.
Popular destinations
Canadians continue to purchase US property mainly in Florida. Florida remained most popular with Canadian snowbirds and was the top choice of foreign buyers overall.
“Many Canadians and other foreigners found Florida so enticing because of its lenient tax laws,” said Yun. “Additionally, many Florida metro areas have an inventory of cheaper properties, relatively speaking – a combination which makes the state a very popular destination.”
California and Texas are both popular choices, accounting for 12% and 10% of international purchases respectively, while Arizona was popular with Canadian buyers and had a 5% share of international transactions overall.
Source: Mortgage Broker News
