Business

US sees spike in Canadian homebuyers

a sold sign in front of a California house Image copyright Getty Images
Image caption Sunny and warm Florida, California and Texas were top states for foreign buyers

Canadians reeling from high prices at home helped fuel an increase foreign home purchases in the US, according to a survey of US property agents.

Canadians spent $19bn, more than double the previous year, much of it in the sunny southern state of Florida, the National Association of Realtors said.

Purchases by foreigners increased 32% from April 2016 to March 2017.

They accounted for about 5% of the US housing market.

The National Association of Realtors report was based on a survey of about 6,000 real estate agents. It looked at sales of existing homes between April 2016 and March 2017.

Foreigners living in the US and abroad - including recent immigrants, people on visas and investors living abroad - accounted for roughly 284,455 homes sold in that time, up 32% from the prior year, the report said.

Much of the activity occurred in the second half of 2016.

But demand from foreigners may be cooling this year, said Lawrence Yun, an economist for the association, an industry group that represents real estate agents.

"Stricter foreign government regulations and the current uncertainty on policy surrounding US immigration and international trade policy could very well lead to a slowdown in foreign investment," he said.

Foreign purchases represented a record $153bn, or about 10% of the existing home sales market, the National Association of Realtors said.

Foreign buyers typically paid about $300,000 - well above than the US median sales price of about $235,800. About 10% bought homes worth more than $1m.

Image copyright AFP/Getty
Image caption Florida was a hot market for foreign buyers

Measured in dollars, Canadian investment hit a new high, the report said.

Almost two-thirds of Canadian purchases were expected to be used as holiday homes or as investment properties. About three-quarters of buyers paid in cash.

Mr Yun said fast-rising property values in Canada, particularly in some cities attractive to foreign investment, such as Toronto and Vancouver, may have led buyers to consider the US.

A strengthening US dollar may have added pressure to act, he said.

Where buyers came from

Buyers living outside the US represented 42% of the foreign purchases.

Chinese buyers accounted for about 40,570, or 14%, of the purchases, up 39% from the prior year. They spent $31.7bn - far more than any other country.

Canadians accounted for about 33,800, or 12%, of the purchases, rising 26%.

Mexicans made 28.516 purchases, or 10%, an increase of nearly 60%.

Buyers from the UK made about 12,870 purchases, up 40%.

Most of the Chinese and Mexican buyers lived in the US, while UK and Canadian buyers were more likely to keep a primary residence abroad, the report said.

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