Canadians investors looking to get into the Florida real estate market are finding it increasingly tough to locate properties in the Sunshine State as younger buyers fuel demand, pricing others out of the market.
“There are definitely younger buyers coming into the market,” Doris Salazar, a real estate agent with the Elite Sales Group in Miami, told CREW. “The older people are heading up to North Florida in places like Vero Beach while the younger people are looking at condos and other home-types in Miami. There’s a lot more action from foreign buyers these days, especially from Canada and in the luxury market.”
Florida has consistently been a hotspot for older Canadians looking for investment properties but things have slowed over the last year as interest from young buyers grow and a sinking loonie compounds things.
As a result, Florida is now lagging behind California and Texas – two of which are without state income tax requirements. However, some are finding it increasingly difficult to locate affordable properties.
“The problem that Canadians are having right now is not the fact that they don’t want to buy here; it’s that they are being priced out of the market like everybody else,” said real estate agent and investor Brent Leathwood in a recent article in the Globe and Mail.
The influx has resulted in a lack of inexpensive properties in quality locations, which is subsequently driving up prices for old homes, lessening the price gap for a new home. What’s more, more than 85 per cent of Canadian buyers paid cash and many aren’t affected by a low Canadian dollar.
According to the National Association of Realtors (NAR), Canadians make up 31.6 per cent of all foreign buyers, more than any other country in the world. What’s more in South Florida specifically, seven per cent of Canadians represent the buyers’ market.
The NAR did a study recently finding that half of Canadian buyers surveyed paid less than US $200,000 in 2014, with the mean price being $260,800, which is less than the $300,600 foreign buyers elsewhere shelled out.
Among those Canadian buyers surveyed, 53 per cent of their home purchases were for vacation homes, while 61 per cent and the majority of buyers planned to use the properties for three to six months out of the year.
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