The average price a Canadian paid for a U.S. home jumped 69% to over $560,000; one out of three bought in Florida.
Canadians have bought significantly more expensive homes in the United States over the past year, as they look to their southern neighbor for sunny, high-end vacation spots in places like Florida, Arizona and California, according to an annual survey of brokers by the National Association of Realtors.
Between April 2016 and March 2017, Canadians doubled the amount spent in the U.S., a sum of $19 billion on mostly vacation homes and residential investment properties, according to a report the association released Tuesday. Canada’s burning hot housing market, particularly in Toronto and Vancouver, has fueled purchases in the U.S., as baby boomers cash out on their long-time family homes in Canada and use the spoils to pick up amenity-rich second homes in the U.S.
“We’ve had such a dial up in prices,” said Toronto-based broker Janice Fox of Hazelton Real Estate. “Canadians are are selling homes for prices they never could have imagined and that’s allowing them to buy vacation homes for prices they never could have imagined. They just have tons of free capital.”
The association’s survey showed Canadians bought about 25% more homes between April 2016 and March 2017 than they did in the 12 months prior, but the bigger change has been in the amount they are shelling out for each home.
They spent $560,000 on average, a 69% jump from the year before, according to the association’s report. That’s well above the average price of about $406,000 that domestic buyers are paying, according to the latest statistics from the Census Bureau.
Concentration in Florida
More than one out of three Canadian buyers in the U.S. choose homes in subtropical Florida, with the majority of those snapping up homes around Miami, Fort Lauderdale and West Palm Beach, according to the National Association of Realtors.
Arthur Martens, a broker in Palm Beach with Engel and Völkers affiliate Carr Sollak Realty, said the typical buyer he sees is looking for a luxury condo—sometimes more than one—priced above $1 million. These high-end buyers have not been put off by unfavorable exchange rates, he said.
“They tend to be Canadians who have not just a couple million or $3 million in assets, but are worth $10 million and up. It’s not uncommon for them to pay $1 million to $3 million on a home,” said Mr. Martens, himself a Canadian citizen and long-time permanent resident in the U.S. He pointed out the example of a Canadian business owner who keeps several condos at the boutique-style waterfront development One Singer Island in Singer Island, Florida.
Ms. Fox, the Canadian broker from Toronto, owns a vacation home of her own on Singer Island. She said she would not be surprised if every condo building on Singer Island was 20-30% Canadian owned.
“A lot of those snowbirds want new developments. It’s their resort property,” said Ms. Fox, who will soon launch sales in Canada for the new Four Season Private Residences Fort Lauderdale. “They want a valet, they want a concierge, they like maid service.”
Influx of High-End Buyers
During the U.S. housing collapse between 2009-11, Canadians, particularly those from oil-rich western provinces, took advantage of depressed prices and easy access to the U.S. by snapping up cheap vacation homes in warm places like Arizona, Nevada and Florida. They were the largest contingent of foreign buyers in the U.S. every year from 2010-12. At their peak activity in 2010, Canadians bought nearly 70,000 homes for a total of $17 billion.
While the number of transactions has fallen to half what is was in 2010—only 33,800 over the past year—Canadian nationals have apparently upped their budgets considerably.
New developments in Boca Raton like Akoya Boca West, a condominium at the Boca West Country Club, have seen an influx of new high-end buyers from Canada, a spokeswoman for the development said. The country club already had about 20 Canadian owners, an established community that has helped attract new blood to Akoya, where units are selling for between $895,000 to over $2 million.
Even with a large contingent of Latin American buyers in Florida, Canadians spent the most of any foreign nationals in the state—around $3 billion on 2016, according to the latest statistics from the National Association of Realtors.
The association speculated in its report Tuesday that the uptick in the average price Canadians paid over the past year is due to more long-term Canadian residents in the U.S. Home buyers are more likely to splurge on a property they consider a primary residence than a pure vacation home, according to the association.
Indeed, the association’s report estimated that the portion of Canadian buyers who bought a what they consider a “primary residence” in the U.S. jumped 9% between 2016 and 2017.
Cash Remains King
The vast majority of Canadian buyers in the U.S., some 76%, pay for their homes in all cash, according to the association.
“The value of properties is higher than they were,” said John Slivon, president of the realtors association in Palm Beach and Greater Fort Lauderdale. “Even with that, most of these guys are paying cash.”
Around Port St. Lucie, Florida, where Mr. Slivon works, about 8% of buyers are from Canada. In that area, most are looking for the security of a gated community or country club, Mr. Slivon said. “These are well-to-do Canadians who say ‘Let’s get out of the great white north.’”