International buyers have set their sight on Florida real estate and Canadian buyers have made their presence known in Naples, as two Royal Bank of Canada locations exist within the city limits.
Recently the National Association of Realtors surveyed Florida Realtors in order to assess the significance of foreign buyers in Florida. The study highlights Canadian buyers as the largest collective group of foreign purchasers of Florida real estate. In 2010 international buyers spent more than $12 billion in Florida, and the 2011 report indicates that Canadians represent 39% of foreign purchases.
What types of homes do Canadians purchase?
In 2011 thirty-nine percent (39%) of foreign buyers purchased a detached single-family home in the U.S as compared to fifty-one (51%) in 2010. In 2011 international buyers increased their affinity for condos as forty-nine percent (49%) purchased condos (up from 37 percent last year). In comparison, fifty-seven percent (57%) of Canadians choose to purchase condos while thirty- two percent (32%) selected detached single family homes.
How much do Canadians spend on property in Florida?
Volatility in the U.S. housing market spawned by the troubled economy and foreclosures makes purchasing property in Florida an attractive option for foreign buyers. A majority of Canadian buyers spend less than $ 200,000 for a home in Florida. The median price purchased by Canadians was $ 151,500 lower than the median of price of $ 174,700 noted for all other foreign buyers.
Canada — Price of Homes Purchased
$99,999 or less 35%
$100,000 or $199,999 29%
$200,000 to $299,999 13%
$300,000 to $399,999 11%
$400,000 to $499,999 6%
$500,000 to $749,999 3%
$750,000 to $999,999 2%
$1,000,000 or more 1%
Median Purchase Price $151,500
Do Canadians purchase property in Florida as a rental investment?
While Canadians buyers believe that purchasing property in Florida is a good investment, a significant number of owners intend to use this property as a vacation home for less than six months a year. Canadians do purchase with the possibility of renting their vacation home when not in use but at the onset Canadians seek a home in Florida that they can enjoy with their friends and family.
Canada — Intended Use of Home
16% Rental property for investment
53% Vacation home for family and friends
5% Retirement home
1% Don’t know
How do Canadian purchasing trends fit into the U.S. market?
While Canadians may spend less in comparison to Americans on a property in the U.S. it is the type of property that is key. Lending restrictions on condominiums in the U.S. have come under severe scrutiny by the banks impeding many American buyers from purchasing due to financing limitations. Canadians who typically buy lower priced properties are drawn to purchasing condominiums and are not restricted by the lending standards as the majority tends to purchase their investments with cash.
Canada — Financing the Home Purchase
91% All cash (no mortgage financing)
9% With mortgage financing
Source: NAR Florida International Survey. 08/2011
The complete survey by NAR is available by clicking here. http://www.floridarealtors.org/Research/upload/2011-FloridaInternationalSurvey-August-22-2011.pdf