Eric Beauchesne, Canwest News Service Published: Thursday, September 11, 2008
OTTAWA — Canadians have been flooding into the depressed U.S. housing market, purchasing a record number of homes south of the border, and twice as many as a year earlier. Armed with what until recently was a strong currency, most were also paying cash, according to the 2008 National Association of Realtors annual profile of international home buying activity in the United States. Canadians have replaced Mexicans as the top foreign buyers of U.S. properties, the survey revealed. The surge in purchases of U.S. properties by Canadians is due to the combination of the stronger dollar, a drop in U.S. house prices, and last winter’s record snowfall, John Clinkard, a consulting economist with Reed Construction Data, said in an analysis of the report Wednesday.
The annual report, based on a survey of U.S. realtors, found that in the 12 months ended last May, nearly a quarter of foreign buyers of U.S. properties were from Canada, double the proportion of a year earlier, reflecting both a surge in Canadian buyers to a record high and a drop in purchases by other foreigners.
“Condominiums were most popular among those foreign buyers from Canada,” it said, noting that nearly half of all properties purchased by Canadian buyers were condominium apartments.
Florida and Arizona were the most popular states for Canadian buyers, accounting for more than 60% of their purchases. The amounts Canadians paid for their properties were relatively modest compared with other foreign purchasers. The median price — with half higher and half lower — of properties purchased by Canadians was US$277,800, well below the US$450,000 by buyers from China, and less than the US$297,000 paid by all foreign buyers. Among the six top nationalities of foreign buyers of U.S. properties, only Mexicans paid a lower median price than Canadians.
Only 5.1% of Canadian buyers paid more than US$1-million. Foreign buyers, especially Canadians, were also much more likely than Americans to pay cash for their homes. “In fact, buyers from Canada were more than twice as likely to purchase a U.S. home with cash than via any other method,” it said, noting that 69% did so. That foreign buyers were more likely to pay cash for their homes may be because they tend to be relatively well off, or like Canadians, are not entitled to deduct mortgage interest payments, which makes it less attractive to take out a mortgage than it is for Americans.
Mr. Clinkard, meanwhile, predicted the shopping spree will likely cool as a result of the recent retreat in the value of the Canadian dollar, slowing income growth in Canada, and a firming of U.S. housing prices. “However, over the longer term, an increasing number of retiring Baby Boomers seeking relief from the winter chill will ensure that Canadians continue to be major foreign buyers of U.S. residential property for the foreseeable future,” he added.
TORONTO, SEPTEMBER 9, 2008 – The seasonally adjusted annual rate (SAAR) of total housing starts jumped to 57,200 in August, according to preliminary housing starts data released today by the Canada Mortgage and Housing Corporation (CMHC) for the Toronto Census Metropolitan Area (CMA). A rise in condominium apartment starts in Toronto City, Brampton and Mississauga drove the increase.
For the first eight months of 2008, total housing starts on an unadjusted basis are up by 32 per cent compared to the same time period a year earlier. This increase has resulted from the record pace of condominium apartment construction this year. Construction of all low-rise housing types is down year-to-date.
“Following a record year for condominium apartment sales at the pre-construction stage of development in 2007, the pace of starts has increased dramatically in 2008,” says Jason Mercer, CMHC’s Senior Market Analyst for the GTA. “Over the past five years condominium apartments have accounted for a rising share of new home development in the GTA as the cost of owning new low-rise housing has become too high for an increasing number of households, especially first-time buyers.’’
By: Julia Le September 3, 2008 03:20 PM - Lorne Park homes were the hottest on the housing market in the GTA during the first half of this year, according to RE/MAX Ontario-Atlantic Canada.
Despite forecasters predictions of a cooling market this year, sales of single-detached luxury homes for sale, including those in Lorne Park, made a double-digit increase.
The selling price of the average Lorne Park single-family home increased by over 13 per cent to $670,914. David Ferrari, owner of RE/MAX Realty Enterprises Inc. in the Port Credit and Clarkson/Lorne Park areas, said the price is right at Mississauga’s waterfront.
“The prices of homes in Lorne Park versus Toronto is a significant amount,” said Ferrari. The Realtor said the homes are selling to Toronto professionals, including doctors, lawyers and engineers who are migrating west.
“You can get a much larger, upscale home in Lorne Park than in the Toronto area and a lot more property.” Ferrari adds that the area has lots to offer, including easily accessible GO transit, a great small-town feeling with a scenic walk along the waterfront and plenty of redevelopment.
“At (Hwy) 10 and Lakeshore Rd., you have new development, new condominiums and townhouses and new stores,” said Ferrari. “The area is being revitalized.” He said demand for homes in the area will see house prices hike another three per cent within the next year.
