Over the past year the loonie has fallen by around 10% and as a result Canadians are buying less property in the United States. For the very first time, Chinese buyers have overtaken Canadians as being the biggest foreign purchasers of property in the US.
The article in the Wall Street Journal points out that Chinese buyers accounted for 16% of sales to international buyers in the 12 months ending this March, according to figures from the National Association of Realtors. In contrast, Canadian buyers accounted for just 14% of sales to international buyers, a considerable fall from 23% which was the figure for 2013.
Apparently the biggest fall is at the lower end of the market as Canadians traditionally bought condos and smaller properties in cities such as Orlando and Honolulu as investments. Purchases were particularly popular when the US housing market crashed and while the Canadian dollar was much stronger. Currently the Canadian dollar is trading at just $.75 to the US dollar and as a result many Canadians are selling up.
Things at the luxury end of the market haven’t been nearly so badly affected, according to real estate agents in Arizona, California and Florida which are the three states with the highest numbers of Canadian buyers. Overall, real estate agents are seeing fewer Canadian buyers but those that are purchasing property are purchasing for a higher price point. Those Canadians that are buying property in the US are taking a longer term approach and still feel it is a great time to invest in real estate although they may concede that they wish they’d bought a few years ago when the Canadian dollar was at par with the US dollar. However a considerable number of those purchasing homes will eventually wish to retire in one of the warmer US states and feel it is better to purchase now than to wait in case things become even worse.
The combination of higher home prices in Florida and the weaker Canadian dollar means that property is costing far more than it would have done five years ago at an average of $400,000 instead of $300,000. Data from Realtor.com shows that searches by Canadians for properties in the US over the past 12 months fell for more moderately priced homes but increased for higher priced properties. While page views were up for many areas of Hawaii and for Cambridge Massachusetts, New York and Kennebunkport in Maine, page views declined for areas where prices are typically lower.