Canadian Buyers Get Back In the South Florida Game
March 17, 2017
It is no secret that Canadians love to escape the dreary winters and take refuge in South Florida, where they can enjoy the tropical weather, shopping, dining and everything else that comes with the “snowbird” lifestyle. The loonie’s historic plunge in the first quarter of 2016 resulted in Canadian home and condo buyers staying largely on the sidelines for most of the year, however.
As 2017 gets underway, all signs point to a Canadian buyer resurgence in South Florida. Representatives from residential projects in the region are citing an influx of Canadian buyer inquiries. Analysts and industry organizations are supporting that anecdotal information with their own reports.
For instance, in January the Miami Association of Realtors released its latest report of the top foreign countries searching for property in South Florida through its search portal. For the first time since November 2013 and just the second time since the association began tracking the information, Canada topped the property web search rankings. The No. 2 country, Colombia, led the association’s rankings for 10 consecutive months before being overtaken by Canada.
The tire-kicking that occurred during the fourth quarter of 2016 is translating into completed sales to Canadian buyers in the beginning of 2017.
As Canadians make their way down to South Florida, The Gale Residences Fort Lauderdale Beach is on the radar of many.
Beyond wanting to own a South Florida vacation home for the brutal winter months, many Canadians look to operate their residences as income-producing rental properties when they are not being used. That significantly helps offset the purchase price and cost of ownership. At our Gale Residences Fort Lauderdale Beach condominium project, we had those buyers in mind when we introduced a “flexible rental” program in which owners can rent out units for any period of time they want (even daily) either through the Gale or directly, using a mobile app to provide virtual unit keys to guests for a specified period of hours or days.
While financing options exist, the majority of Canadian buyers in South Florida opt to pay for their vacation homes with cash. About 86 percent of Canadian buyers paid all-cash for South Florida property in 2015, according to the Miami Association of Realtors. That exceeds the percentage of cash purchases from any other country.
Others who prefer to finance their purchase should be able to find a lender – even in an uncertain and heavily regulated U.S. banking environment. Most South Florida banks have programs in place to seamlessly lend to foreign nationals, while some Canadian institutions – like RBC Bank, which has a dedicated Cross-Border Mortgage Team – will lend to residents who want to buy U.S. property.
For Canadians looking to make a first purchase in South Florida, there are numerous estate, capital gains and other tax implications to consider. Those buyers should consult a tax attorney or Certified Public Accountant before starting their search for a vacation home or investment property.
The National Association Realtors reported that while sales volume on vacation homes in the U.S. fell in 2015, the median sale price rose by 28 percent, and most of the price appreciation was in the South, “particularly in several Florida markets,” according to the report.
In 2016, some Canadians owned Florida real estate cashed out due to the currency exchange, political uncertainties and other factors. One year later, the tide is turning back towards buying.
Harvey Hernandez is Chairman and CEO of Miami-based Newgard Development Group, which is developing the Gale Residences Fort Lauderdale Beach luxury condo