ALISPELL, Mont. – Fewer license plates from Canada are showing up in northern Montana as the Canadian dollar continues to weaken, and in the process drives property investors away.
As of Aug. 31, the U.S. dollar was worth $1.32 in Canadian currency, the strongest the U.S. dollar has been in at least five years.
The Canadian dollar is tied to the commodity market, unlike the U.S. greenback. So when oil prices began falling this summer, dipping below $40 a barrel for the first time since 2009, the Loonie followed suit.
Patrick Barkey, the director of the Bureau of Business and Economic Research at the University of Montana, said the drop in oil prices is the second gut-punch the Canadian dollar received, since the price for natural gas is also low.
“Oil is just the second shoe to drop there,'' Barkey told the Flathead Beacon
But while restaurants and stores are feeling the decline in business. the construction and real estate industries are also positioned to feel the sting of fewer Canadians buying or building second homes here, said Barkey.
The phenomenon is being felt not only in Montana, but Florida, Arizona and Nevada – traditional hotspots for Canadian property investors. They’ve pulled back on new purchases in those states with the loss of parity between the greenback and the loonie.
Still, interest in Montano among investors continues to grow as they parse through data on population growth and property price appreciation that continues to outpace the US national average.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate