Canadians Rush to U.S. Housing Market

Sep 17, 2008

Armed with a strong currency, Canadians made a record of home purchases in the United States, according to a recently released report.

Canadians bought roughly 13,000 U.S. homes from May 2007 to May 2008, doubling the figure from the previous year, according to the National Association of Realtors. In doing do, Canadians replaced Mexicans as the top foreign buyers of U.S. homes.

A strong Canadian dollar and depressed U.S. housing prices spurred the Canadian buying spree, John Clinkard, an economist at Reed Construction Data, told Canwest News Service.

Condominiums, especially in the warm weather states of Florida and Arizona, were especially popular among Canadian buyers, according to the Realtors report. Purchases in those two states accounted to 60 percent of total Canadian purchases in the U.S. during the year.

Canadians represented 24 percent of all foreign buyers of U.S. homes, the report added.

While a weak U.S. housing market has enticed Canadian buyers of late, the rush to purchase U.S. property has also been facilitated by cross-border financial firms.

Until recently, Canadians encountered hurdles when applying for American loans, having to make down payments of up to 50 percent, according to a report by the Globe and Mail. RBC Bank, for example, a U.S. division of the Royal Bank of Canada, recently set up a program that allows Canadians to purchase homes worth up to $2 million with a down payment of less than 25 percent, the Globe and Mail reports.

While the market has cooled a bit lately as the value of the Canadian dollar has fallen back, economists predict Canadian homebuyers will continue eyeing property south of the border.

"Over the longer term, an increasing number of retiring Baby Boomers seeking relief from the winter chill will ensure Canadians continue to be major foreign buyers of U. S. residential property for the foreseeable future," Clinkard told Canwest News Service.