Northern Views and Southern Blues
U.S. interest in Canadian real estate sees a steep upsurge following Trump’s presidential win, according to recent report
According to a recent report published by Royal LePage Americans, are progressively intrigued by Canadian real estate following President Donald J. Trump’s political victory in Washington.
Royal LePage’s web traffic that originated south of the border saw an unprecedented upsurge (329 per cent) on November 9, the day following the U.S. presidential election. The week following the election saw American browsing numbers skyrocket, quadruple in fact, rising a massive 210 per cent from just one year ago – numbers that could directly affect the Alberta real estate market and indirectly affect the Edmonton MLS® market.
Royal LePage said that this pattern of high volume from the land of red, white and blue was sustained for the remainder of 2016, seeing approximately 40 per cent rises in October through to the end of December.
According to Royal LePage President and CEO, Phil Soper, the U.S. already provided a steady supply of immigrants to Canada and Royal LePage is now watching a material bump in Canadian real estate interest from our southern neighbours.
Ontario saw the most online inquiries in the country, with 41 per cent of American page views focused on our most populous province. The report states that 62.5 per cent of Ontarian real estate advisors mentioned, with particular certainty, American interest was primarily based in the Greater Toronto Area.
B.C. came in second with 17.9 per cent of total searches on royallepage.ca for property in the country’s most western province – most inquiries were seen around Victoria. The higher interest seen in Victoria versus Vancouver could be a result of the B.C. government’s 15 per cent foreign buyer real estate tax ratified last August.
Interestingly, Canadian real estate has become an investment sought-after around the world, in some part, causally influencing the inflation of home prices in many of Canada’s major cities – Alberta real estate in particular. U.K. property giant Grosvenor ranked Toronto, Vancouver and Calgary as the top three most resilient cities when considering long-term investment in a 2014 study. As such, Calgary home trends tend to influence those of Edmonton real estate – as the two cities tend to influence each other. The Grosvenor report isolated Torontonian real estate as a model of healthy investment, citing the city’s long-term infrastructure commitments as desirable.
Despite this, foreign real estate ownership in Canada still continues to be low. The Canadian Mortgage & Housing Corporation (CMHC) published a report in November 2016 that identified foreign ownership of condos in Toronto and Vancouver (Canada’s largest concentration of foreign property purchases) at just 2.3 per cent and 2.2 per cent, respectively. The statistics remain informative, but contentious.
Although real estate in the U.S. is still comparatively inexpensive when stacked up against Canada’s major centres (excluding New York, San Francisco and Los Angeles), American interest in Canada’s housing markets could be a symptom of the low Canadian dollar. Since 2014, the loonie has lost 25 per cent of its former value relative to U.S. currency, and as such, American purchasing power in regards to Canadian property has dramatically risen.
Soper stated that given the vast American population, any increase – even a small fraction – in the numbers of households acting on these purported desires could drive a substantial increase in southern home-buyers.
If Canada’s real estate market were to see an influx of foreign buyers, Alberta’s real estate market, and indirectly Edmonton’s real estate market, could be affected. Something to think about.