Canadian buyers spend record $19bn in US housing market in a year: Report

The Canadians are buying up American housing in record numbers, spending an all-time high US$19 billion in a year, according to a report from the US-based National Association of Realtors (NAR).

Between spring 2016 and spring 2017, the Canadian buyers spent the walloping amount but the figure may come as a surprise given the relative weakness of the Canadian dollar against the Greenbacks.

Canadians were the second biggest foreign buyer of US residential real estate, behind only the Chinese, who spent $31.7 billion US, leading the list for the fourth consecutive year.

Florida was the leading destination for Canadian buyers. Not surprisingly, the other top states are also warm: Arizona, California, Texas and Georgia.

According to the experts, “the shopping spree is being led by two groups: retirees who don't want to wait for the exchange rate to improve and investors looking to cash out of the hot Canadian real estate markets in Toronto and Vancouver.”

Economist Lawrence Yun with the National Association of Realtors told CBC news that those red-hot Canadian markets have allowed Canadians to build up their equity elsewhere at the prices still rising at home.

"Canadian consumers are seeking out bargains, and they see big bargains south of the border," Yun said.

Canadian Jay Phillip Parker, who heads the Florida division for Douglas Elliman Real Estate, one of the US's largest brokerages, said: “the report's findings aren't surprising given the pent-up demand in Canada.”

"If you look at the average price of real estate across most major metropolitan markets globally, South Florida is an extraordinary bargain," he said.

Real estate broker Brent Leathwood with Cross Border Realty in Sarasota, Florida., said he would see “a steady stream of investors who feel the Canadian real estate market is near its peak and want to park their money elsewhere.”

"The exchange rate and the markets only really affect how much house they can buy, not whether or not they want to buy a home," he said.

The NAR survey also found that Canadians led the way in selling US real estate. It estimates 22 per cent of all international sales were by Canadians.

That doesn't surprise brokers like Diane Olson of Glass House International Real Estate in Arizona, who said she's seeing more sellers than buyers, according to CBC report.

Many, she said, are taking advantage of the low Canadian dollar to profit from the gains they've made in recent years.

She said many bought in 2010 when the loonie ended the year nearly on par with the US dollar. At the time, prices were cheap because of the US housing collapse, creating a perfect storm for Canadian house hunters.

In fact, the previous high for Canadians spending in the US housing market was $17.1 billion in 2010.

Olson said in 2016 especially, Canadians she worked with took advantage of the opposite conditions, a low Canadian dollar, coupled with high US housing prices, to sell US property.

"Many of their properties had appreciated, many of them doubled in value or even more, so we called it the reverse perfect storm."

Parker says one way to explain the $19-billion figure is that Canadians are generally buying more expensive properties in the US.

The survey found Canadians spent an average of $247,283 in 2010, compared to $560,844 in 2017.