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While economists continue to forecast a rise in the Canadian dollar over time along with some volatility, Canadians are hurrying to take advantage of its strength.
The combination of the strong Canadian dollar with historically low Florida real estate is making many Canadians believe that this is a once in a lifetime buying opportunity for them. The number of Canadians buying U.S. real estate of all foreign buyers is incredibly high, approximately 23%. In addition, property prices have fallen about 40 to 60% from their peak, creating a sense that this is the right time.
“Every time the dollar reaches beyond parity, we see a spike in the number of calls we get from Canadians purchasing U.S. dollars for their property purchase” says Rahim Madhavji, president of Knightsbridge Foreign Exchange, an online currency exchange company. “Many Canadians that have been travelling to the U.S. for years see this as the right time…the buzz around cheap real estate and the strong Canadian dollar is creating euphoria”
With almost one in four homes in the U.S. financially underwater, some claim low prices will stay for some time, especially considering the shadow inventory of units not on the market as of yet. Many agents tell Florida buyers to expect at least five years before they see a meaningful turnaround.
Many Canadians are also considering Florida property for investment purposes. “We’ve seen the same clients come back a few times buying condos in Orlando for $40,000 to $60,000,” says Madhavji. However, Canadians need to be careful about U.S. tax laws when considering either a vacation or investment property.
In Florida, Canadians can expect to pay higher property tax than residents. Moreover, those that rent out property may face a withholding tax (about 30%) that is applied to rental income paid to Canadians.
With almost one in four homes in the U.S. financially underwater, some claim low prices will stay for some time, especially considering the shadow inventory of units not on the market as of yet. Many agents tell Florida buyers to expect at least five years before they see a meaningful turnaround.
Many Canadians are also considering Florida property for investment purposes. “We’ve seen the same clients come back a few times buying condos in Orlando for $40,000 to $60,000,” says Madhavji. However, Canadians need to be careful about U.S. tax laws when considering either a vacation or investment property.
In Florida, Canadians can expect to pay higher property tax than residents. Moreover, those that rent out property may face a withholding tax (about 30%) that is applied to rental income paid to Canadians.
Despite some of the complexities of purchasing U.S. property, many are snapping them up and many agents now focus on serving Canadian buyers and can make the process relatively seamless.
Source: Mark Borkowski, President, Mercantile Mergers & Acquisitions Corporation
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.
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