But with the dollar continuing its steady decline, Shaadi Faris, VP of Intergulf Development Group, said he expects fewer Canadians to invest in the U.S., let alone California, as the number of California homes bought by Canadians stood at 13 per cent in 2013.
“Warm weather has long attracted Canadians south for the winter,” added Faris. “Falling housing prices after the 2008 recession combined with a resilient Canadian dollar proved the perfect mix to lure buyers to the resort-like markets of Scottsdale, Arizona and Palm Springs, California.”
According to the California Association of Realtors, Los Angeles, San Diego and Riverside were the most attractive cities for Canadian investment in 2014.
Kelly Hudson, a mortgage broker in B.C., said that she had personally considered California before buying an investment property in Phoenix. “The money didn’t go as far [in California] as it did in Phoenix,” she added.
“We were considering homes in San Diego and I would have liked to live there, but it wasn’t financially feasible. With the dollar the way it is now too, there’s very much a wait-and-see approach among investors, so I doubt many will be going down there soon.”
Hudson added that investment in California is more likely to be from wealthy investors, who are more open to taking risks and are not as impacted by the low dollar.
Ken MacCoy, a financial planner and life insurance agent in B.C., said that he has had past clients who have taken the plunge in California, but most have since either sold their homes there or plan to in the near future.
He also said that pending changes to the Cross Border Control regulations between Canada and the U.S., which will create tax implications for both sides, could force Canadians to give up key benefits and owe U.S. income tax.
“One [property] sold a year or more ago due to potential U.S. and Canadian taxes, plus the pending changes to Cross Border Control,” he continued.
“The second still has a property out there, but I expect when he retires he will sell his [Canadian] home and live there in the winter.”
Pick up a copy of the March/April issue of CREW to find out more about investing in the U.S.
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Some 11 per cent of homes bought in California in 2014 were purchased by Canadian investors and buyers, according to a new study from the California Association of Realtors (CAR).