Monday, June 30, 2014

Canadian purchases of U.S. property may decline

Canada, China, Mexico, India and the United Kingdom have been the main clients for the U.S. real estate market. With Canada on top of the list. But with rising U.S. housing prices and a weaker Canadian dollar, Alain Forget, the head of sales and business development at RBC Bank, is not sure Canada will retain its top position  in the rankings of international buyers of U.S. properties this year.

The data coming from the National Association of Realtors south of the border are expected to be released in early July. They will detail purchases between March last year and March, 2014.
 
“I am still confident that we will see Canadians in No. 1 or maybe No. 2,” Mr. Forget says. “But, for example, in South Beach and Miami, Europeans, Russians and Brazilians have been very active buyers of luxury condos over the last year.” 
 
The strong Canadian dollar which topped $1 US for much of 2011 and 2012 has weakened; and has recently been trading at around 93 cents. A weaker Canadian currency makes it less attractive for Canadians to buy properties in the U.S. And even many economists are expecting the loonie to slide below 90 cents the coming year.

The growth in U.S. home prices is moderating but still strong. For instance, housing prices in 20 major cities rose 10.8 percent in April from a year earlier, according to figures released in June from the S&P Dow Jones Indices.

Nevertheless, Mr. Forget points out that Canadian retirees can still buy cheaper homes in many southern locations than they can at home despite the increase in U.S. home prices undergone after the subprime mortgage crisis.

“I just received the statistics for the month of May for southeast Florida, places like Palm Beach and Broward County,” he says. “And the median price for a single home is $282,000. The median price for condos and townhouses is $135,000.” These are low prices compared to the $416,584 Cdn average selling price of an existing home in Canada during May.

According to the realtors’ 2013 survey, Canadians accounted for 23 percent of U.S. sales to foreigners, up from just 10 percent in 2007. That growth came as Mexico’s share fell from 13 percent to 8 percent, and the United Kingdom’s share dropped from 12 percent to 5 percent. China, meanwhile, rose from 5 percent of sales to 12 percent.

Foreigners bought about $68.2-billion US worth of existing homes in the U.S. in the 12 months leading up to March, 2013, down from $82.5-billion a year earlier, and accounting for about 6.3 percent of the total sales. Of the property sales to foreigners, about half were to people with permanent residence outside the U.S. while the other half were to recent immigrants or temporary visa holders.

Source: Business News Network.

10 comments:

  1. mexico is an option to buy, you can buy properties at substantial costs and restore to your liking.

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  2. The canadians normally buy many houses around the world

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  3. U.S. prices increase without limit, but there are other options and they can suggest some of properties mexicohttp://multilistingservicemexico.com/

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  4. good post, we're waiting for next topic

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  5. Sometimes market prices are not constant and people can't choose a good property

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  6. Decline in Canadian purchases might occur in two or three years time if the situations described here continue to develop, but only then. I mean, Canadians bought 23% of the houses followed by China with 12%. There's still quite a big gap between those figures of 2013. Besides, the tendency from 10% to 23% on Canadian purchases is not indicating what this article is affirming.

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  7. as always the closer partner of the USA is the norther neighboor, there are many transactions in both sides of the border, I hope this keep as it is for a long time

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  8. Me imaginaba que algunos Mexicanos adquirian propiedades en Estados Unidos pero no sabia que estaba en la lista de los primeros lugares, otra muestra de la desigualdad en el pais, y no me sorprende el lugar de Canada, por ser vecino y por tener una economia muy desarrollada y un elevado poder adquisitivo en sus ciudadanos.

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  9. (“I just received the statistics for the month of May for southeast Florida, places like Palm Beach and Broward County,” he says. “And the median price for a single home is $282,000. The median price for condos and townhouses is $135,000.” These are low prices compared to the $416,584 Cdn average selling price of an existing home in Canada during May) wow I cant believe that! I always thought that a property in Florida would be more expensive than one in Canada! but amazing info.

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