The depreciation of the Canadian dollar may halt the flow of cross-border shoppers but it may not have as big of a dent in investor appetite for U.S. real estate, says a new report by TD Economics.
“Make no mistake, the depreciation of the Canadian dollar will have an impact on Canadian stays in snowbird destinations such as Florida, but less than one might expect,” the bank says.
The Canadian dollar slipped 0.04 of a cent to 90.32 cents US yesterday as commodity prices fell and markets awaited the latest readings on U.S. consumer confidence and house prices.
TD expects both spending and long-term visits to grow over the next few years in snowbird destinations, such as Florida, albeit at a slower rate than in recent years. The rebound of the U.S. housing market and limited stock of low-cost properties are also impacting Canadian decisions to flock south.
“Existing Canadian property owners in U.S. real estate will likely be inclined to gold on to their appreciating investments. And for those Canadians that rent out their units, the drop in the Canadian dollar has improved cash flow in Canadian-dollar terms,” says TD.
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