Recent Statistics regarding Canadians Purchasing US Real Estate
Printer-friendly versionSeptember 2008
Destinations of Interest
Cash Purchases
Despite the US economic uncertainty, the United States real estate market continues to be an interesting option for foreign home buyers. This is notably true for North American buyers, whose participation increased by ten percent in comparison to 2007. Based on a recent survey of International Home Buying Activity prepared by the NATIONAL ASSOCIATION OF REALTORS, the top six countries of origin for foreign real estate activity are Canada, the United Kingdom, Mexico, China, India and Germany. Most interestingly, Canada's participation in US real estate has doubled from the previous year, accounting for close to a quarter of foreign buyers.
Economic & Social Influence
Certain economic and social factor may explain the high interest that Canadians have in US real estate. Evidently, the value of the US dollar as compared to foreign currencies has dropped significantly over the past several years. In fact, the Canadian dollar has strengthened between 10 and 20 percent versus the US dollar in the last few years. Additionally, the US housing market continued to decrease from 2007 through to 2008. When combined, these conditions result in affordable US homes for Canadians and other international buyers. As well, many potential purchasers are attracted to buying homes in the United States due to family connections or even local attractions such as golf clubs and beaches.
According to the NAR, there is a strong trend in the type of properties purchased amongst foreign buyers. Amounting to nearly three quarters of the purchases, detached single-family homes were the most popular. This is followed by townhouses and condominiums, which combined, account for 27%. Despite this trend, Canadian buyers mostly preferred condominiums, which total to over thirty percent of the properties purchased by Canadians. In addition, close to 65% of Canadian buyers plan to use their US homes for vacation purposes, compared to about 7% who were motivated by the investment aspect. The survey also reveals that on average, foreign buyers estimate that they will stay in their US property 2.6 months per year.
| Preferred Destination by Canadian Buyers | |
| Destination State (U.S.) | Share |
| Florida | 33.1% |
| Arizona | 27.2% |
As observed in previous years, the South and the West of the United States are the regions that most interest international buyers. These two regions account for more than three quarters of all international real estate activity. More specifically, Florida, California, Arizona and Texas were the four dominating states. From Canada, more than 60 percent of the properties purchased were in Florida or Arizona.
| Price of homes purchased by Canadians | |
| Under $200,000 | 24.6% |
| $200,001 to $300,000 | 32.6% |
| $300,001 to $400,000 | 12.3% |
| $400,001 to $500,000 | 8.0% |
| $500,001 to $750,000 | 12.3% |
| $750,001 to $1 million | 5.1% |
| Over $1 million | 5.1% |
| Median Price | $277,800 |
In comparison to domestic buyers, international buyers tend to purchase more expensive homes. The standard international buyer paid 297,400$, while the national purchaser paid on average 217,900$. Moreover, 14% of foreign home buyers paid more than 750,000$ for a home in US. Amongst Canadians, 70% paid for their US homes in cash, while only 30% used a mortgage to finance their investment.
Conclusion
This survey confirms a trend that foreign buyers are increasingly purchasing properties in the United States for various reasons. In light of this favorable situation, as well as the increase in the value of purchases, it is important to properly consider the legal, tax and estate aspects of such an important cross-border real estate transaction for the Canadian puchasers.
Graphic Representations
