Why Are Western Canadians Buying Arizona Real Estate?
by: Brian.Brady on April 26, 2008 16:44:25 4 comments »
Western Canadians are buying real estate in Arizona. There are three reasons for this modern day land grab:
1- Crude oil and minerals have led the commodities price surge, world wide. Western Canada is rich
with both minerals and crude oil. While the Western United States is experiencing a housing-led recession, the opposite is happening to our Northern neighbors.
2- The Canadian dollar (sometimes called the “loonie”) has reached parity with the American dollar. What used to cost a Canadian $1.15 , now costs about a buck.
3- Housing prices in both Arizona and Southern California are over 20% off of their high prices.
4- Mortgage rates, for Canadian investors, have dropped from 8.5% to 7.2%.
Let me lay it out for you in a story. Bob Miller, from Calgary, earned some $150,000 Canadian in 2006. Bob works as a petroleum engineer. His 2007 income rose some 25% to $190,000 because of the high demand for petroleum engineers in Western Canada.
Bob’s purchasing power, in 2006, was about $127,000 American. He could afford to buy a golf course property, in Avondale, AZ, for about $350,000. To do that, he’d need about $135,000 Canadian for a down payment and have a mortgage payment of about $2,000 Canadian, or 16% of his monthly income..
Today, that golf course home in Avondale, AZ is priced at $275,000 American. Bob only needs to put
down $90,000 Canadian. The strong Canadian dollar and lower Arizona property price means that his initial investment is reduced by over 35%. Lower mortgage rates (and a lower loan amount required to purchase the property) reduces his monthly payment to $1135 Canadian. Bob’s higher income combined with the lower payment makes this Arizona property investment just 7% of his monthly income.
A stronger economy, a weaker American dollar, and a rapid decline in Arizona housing prices makes a”perfect storm’ for Canadian investors who want to own a property in the desert. Flights are direct to Phoenix from many Western Canadian cities.
Mortgages are available for Canadian investors. Call Brian Brady at (858)-777-9751 for more information.
· http://BenjaminBach.comWhat used to cost $1.55 CDN now cost $1 CDN
The loonie has had a *big* swing in recent years.
Permalink April 27, 2008 02:05:00 · http://www.hifx.comGreat article, as a global currency specialist who works with Arizona real estate agents we have seen a drastic increase in the number of Canadians buying in Arizona for all of the reasons you mentioned. The last time the looney was at par with the USD was 1976, and we have seen a 16% strengthening in CAD in the last year alone.
Permalink April 28, 2008 11:14:56 · http://www.realestaterant.net/The properties used in the site are awesome.I came to know that Western Canada is rich with minerals and crude oil and the Canadian dollar has reached parity with the American dollar.The housing prices are very high in Arizona and Southern California.
Permalink April 29, 2008 03:18:48 · http://westtorontorealtor.com/about/why-choose-jill/I agree with a comment above that properties on pictures are awesome. Maybe that is the reason. I am working as a West Toronto realtor and I am not so sure about reasons why Canadians are so attracted with Arizona real estate market. Sure parity of Canadian loonie is quite different than few years ago but I think that to some extend it could be just short term speculation in order to gain some money from volatile market.
Permalink May 15, 2008 15:24:05This post has no feedback awaiting moderation...