In Florida, It's A Great Time For Canadian Homebuyers

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In Florida, It's A Great Time For Canadian Homebuyers

by Greg Allen
February 18, 2011

Listen to the Story

J. Pat Carter/AP
A for sale sign hangs in front of a Homestead, Fla., home. In certain places more than half of the homes sold are in one stage of foreclosure or another.

February 18, 2011
In especially troubled housing markets such as Florida, foreclosures are down, four years into the housing crash.

But that's thought to be just temporary. Sales are up in Florida, but in some areas more than half of those sales involve foreclosures.

There's one group of homebuyers, however, for whom market conditions couldn't be better: Canadians.

A Piece Of Florida Sunshine

The cars in a parking lot at Walmart in Hallandale Beach, near Fort Lauderdale, tell the tale. About 1 of out every 10 vehicles is from Canada. It's February; the weather is warm in Florida, so many are visiting tourists. But other Canadians are putting down roots.

One recent transplant, Doug Flood says, "If there ever was an 11th [Canadian] province, it probably would be Florida."

Flood moved to Florida from Toronto in 2008. A few years later, he got into real estate. He now specializes in helping other Canadians who want their own piece of Florida sunshine.

As it turns out, there are a lot of them. Canadians are the largest single group of foreign homebuyers, accounting last year for some 8 percent of total residential sales in Florida.

The maple leaf has long been a familiar symbol in Florida beach communities, on both the Atlantic and Gulf coasts. But over the past several years, Canadian visitors have increasingly become homebuyers.

Flood calls it "a perfect storm."

"If you're Canadian," he says, "you've got very low interest rates at home if you want to borrow against your house. You've got a foreign exchange par, dollar-for-dollar. And prices down here that are 40 to 50 percent lower than what they were five years ago."

Canada Avoided The Housing Crash

And here's another factor: Canada largely avoided the collapse in housing prices that devastated American homeowners and the U.S. economy.

Because of tighter financial regulations, things like subprime lending and securitized mortgages are unknown in Canada. Foreclosures are rare. So Canadian real estate steadily appreciated while property values in Florida, Arizona and other hard-hit U.S. markets went into the tank.

Brian Ellis, with Florida Home Finders of Canada, a real estate company based near Toronto, says, "It's put a lot of us in a very, very strong position in that we do have a lot of equity in our homes. And now, we can take some of that equity out, pay cash for either an investment property or a second home in the state of Florida."

Ellis holds seminars in Ontario and Quebec for people interested in buying homes in Florida. His company mostly markets new homes in developments where prices are good and where it can assure clients there are no hidden problems, such as underfunded homeowners associations or Chinese drywall.
Most buyers, Ellis says aren't planning on moving to Florida. They're investors, "all looking at buying property to rent out today to generate cash flow." Ellis says you can't do that in most major cities in Canada. "You can't buy property and be cash-flow positive. Not even close," he says.

Who's Buying
There are wealthy Canadians buying multimillion-dollar beachfront homes. And there are people like Dennis Kivlahan, who recently bought a two-bedroom condo in Fort Myers, Fla., sight unseen.

Kivlahan is a high school history teacher from Ajax, Ontario. He used money from a home equity loan to pay $56,000 cash for the property in Florida.

"I liked the price. It was a very straightforward sale," he says. "We went on vacation there myself, my wife and children. And I saw the unit about three months after I purchased it."

Kivlahan is renting it out with the idea of possibly moving to Fort Myers when it's time to retire.
It's not just individual homebuyers taking advantage of low Florida prices. The Minto group, a Canadian homebuilder, recently bought nearly 1,000 lots near Tampa.

For Canadians, it is an investment and something more — a reminder in the depths of winter, they own a place where it's actually warm.

In a recent phone interview from his home in Ajax, Kivlahan said, "You know right now, as we speak, it's about minus 20 with the wind chill, so I wouldn't mind being down there."

That as much as anything explains why, through boom and bust, Florida real estate eventually always bounces back.
President Camacho
I wonder why this is the case?
Niccolo and Donkey
You can't do it in Toronto and Vancouver simply because rental rates are nowhere near what the actual monthly mortgage is. I can rent out my place and get my mortgage, property tax and condo fees back but will either break even or take a tiny hit when all costs are factored in. In places like Winnipeg or Hamilton you can still make money on duplexes, triplexes, etc. I'm quite certain that you can be positive cash flow in Montreal simply because their market was depressed for so long.
And that's insane. How's everyone going to make money off houses? By renting to everyone else? lol
President Camacho
Ah. I thought he meant it's impossible to break even in long-run ownership, not on a current rents vs. current mortgage payment basis.

Still, the latter scenario is much easier in America because of the possibility (indeed the prevalence) of the 30 year mortgage, while I believe in Canada 20 years is the max, resulting in higher monthly payments.
35-year mortgages are the maximum in Canada. They are currently insured by a government entity. As of March 18th, the government will no longer insure any more 35-year mortgages.

This doesn't stop the banks from lending people money at -25% down, by giving them a line of credit to buy a house with no collateral.

Certain parts of Florida, like the Tampa suburbs, are cheap as hell compared to the NE corridor. Around these parts, one has to pay a large premium on real estate to live away from the 'undesirables.'


Is the Canadian housing market as transparent as the US? Do you have websites like or that provide you with all of the sales and tax history of each house?

No. We have MLS for listings. It's a gov't granted monopoly given to the larger real estate firms.