With the devaluation of the Canadian dollar, I frequently hear “The Americans are Coming!”. But when asked if we have seen American buyers flocking to cottage country to take advantage of their enhanced buying power the short answer is, not yet.
However, I did speak to Paul Crammond, a seasoned real-estate agent with Chestnut Park’s Port Carling office. Paul has seen a definite increase in interest for higher-end cottages from American buyers but with a caveat – most of these buyers are Canadian ex-pats who want to have a base in Canada. For Canadian citizens who have American assets or who are paid in American dollars the timing is good to purchase lakefront cottages in Ontario’s cottage country.
More importantly though, with the appreciation of the US dollar, many Canadian buyers thinking about second home ownership will now find that their dollar goes much further in Canada than in the US. The appreciation of the US dollar has meant a steep increase in the cost of both purchasing and maintaining a vacation home in the United States.
Over the last 10 years, we have found that there has been a group of people who had wanted a vacation home and they had to decide between purchasing a cottage or property in Florida. With the financial crisis and real estate melt-down in 2008, there were a lot of great deals to be had both in Florida and the other southern States. This has meant that over this period of time a lot of potential cottage purchasers had acquired properties in Florida instead of buying a cottage.
But now the tables have turned. The Florida real estate market has essentially corrected itself. Florida bargains are mostly gone and property values have increased significantly. Just as importantly, for Canadians, the cost to maintain a Florida home has also gone up significantly because of the devaluation of the Canadian dollar.
In conclusion, what all this means is that for Ontario buyers, we predict that there will be less interest in the Florida 2nd home market this year and this will subsequently translate into more interest in cottage ownership in 2016 and beyond.
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