1 in 5 Canadians wants to buy US Real Estate

20% of Canadians want to buy US Real Estate
- With the Decline in Value of American Real Estate, Leger Study Shows 20 per cent of Canadians Would Consider Purchasing a Home or Property South of the Border
- Men Are More Likely Than Women to Purchase a Home in the U.S. (29 per cent Versus 16 per ce
Mar. 24, 2011 (Marketwire Canada) --
TORONTO, ONTARIO -- As many Canadians return from south of the border after the March Break, a new survey from BMO Bank of Montreal shows they may have been doing more than visiting theme parks and beaches. The survey conducted by Leger Marketing reveals that one in five Canadians would now consider purchasing property in the United States.
In the study, Canadians indicated that both lower prices and the strong Canadian dollar have added to their interest in purchasing property in the U.S. and growing their assets.
Overall housing prices in the United States have fallen by 30 per cent over the past four years. However, prices in regions that are traditionally destinations for Canadian snowbirds have dropped even more. For example prices in Tampa have dropped 44 per cent, Phoenix, fell 54 per cent, Las Vegas, 57 per cent, and Miami, 49 per cent.
"Now, with the American economy and employment gaining strength, home sales should pick up and put a floor under soft prices," said Sal Guatieri, Senior Economist, BMO Bank of Montreal. "We expect prices to rise over time as the overhang of unsold homes eases."
He adds that beyond this year over the long term the U.S. greenback should strengthen as well. This would provide an opportunity for capital appreciation for Canadians who purchased U.S. property at a low price while the Canadian dollar was high.
The Leger survey also revealed:
Men are more likely to consider purchasing a home south of the border, 29 per cent in comparison to 16 per cent of women.
Regionally, those in Alberta (31 percent), British Columbia (28 per cent), and the Prairie Provinces (27 per cent) are most interested buying property in the U.S.
BMO Mortgage Specialist, Laura Parsons, advises that if the funds to purchase your property are not readily available, consider for example a homeowners line of credit. "By speaking with a BMO Banking Representative, they may be able to set up a line of credit against your current real estate assets. You can then use this to finance your property in the U.S. and give you a realistic spending budget."
Another option is for customers interested in purchasing U.S. properties to finance the new purchase with a U.S. based financial institution. Customers can visit a branch of BMO Financial Group's U.S. subsidiary Chicago bank, Harris Private Bank, which has branches in Illinois, Indiana, Arizona, Florida, and Wisconsin. "Staying within the family can save a lot of time and headache," adds Mrs. Parsons. "Alternatively, seek out Canadian banks that are already established in the U.S. and in the area you are looking to purchase in."
BMO offers the following tips for Canadians interested in purchasing property in the U.S.:
What states and neighbourhoods fit your needs?
Since you are responsible for property maintenance, consider how easily you can access your property from your Canadian home throughout the purchasing process and after acquisition.
Consider flights and airlines, if you can fly there direct, and the cost.
Research and even ask locals about the community to ensure it suits your needs.
What to consider when financing the purchase with a U.S. based financial institution?
It is important to be aware of the differences in mortgage financing and how interest is charged in the U.S.
Furthermore, understand the impact of penalties and withholding taxes if and when you decide to sell your home in the U.S.
Do you understand the status of the property?
Understand the terms of the property. For instance, is it labelled as short-sale or on foreclosure?
The status of the property can have a variety of implications. Be sure to consult an expert before making any buying decisions.
How will you use your property?
Is your purchase for investment or lifestyle purposes? This will affect where you buy and how you hold the property. Also, understand the options available and what will benefit you in the long run.
If your purchase is for income purposes, keep in mind that renting your property means added responsibility. Research the possibilities of increased utility usage, property management needs and the vacancy rate in the area to ensure you're prepared. Investment properties can be subject to taxation in two countries, so make sure you speak to a taxation specialist.
How much time will you spend south of the border?
Consider how many months of the year you'll be living there so that your purchase reflects your lifestyle.
Be aware that there are rules regarding the amount of time you can spend in the U.S. before being considered a U.S. resident and subject to paying income tax.
Internet Address: www.bmo.com
Source: CCN )
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