THE DOLLAR FACTOR

 

For the last few years Florida Home Finders of Canada has been advising our clients to take advantage of the uniquely high Canadian dollar and buy U.S. dollars when possible so that they would maximize the combined benefits of the high Canadian Dollar and low real estate prices in the U.S. Many of you have followed this advice and will not be negatively affected by the shifting values in the currency. This Newsletter speaks to those of you who have not yet converted your money over to U.S. dollars.

Most Economists view the Canadian Dollar as a secondary currency and is therefore subject to fluctuations in the world markets. This is normal and will happen based on market forces and not always a reflection of the strength of the Canadian economy. They expect the dollar to hover between .85 to .95 cents as compared to the U.S. Dollar. At times the currency may dip lower or move higher, but safe to say that this is the range we can expect to see the Dollar for the coming year.

The valuation of the Canadian dollar is only one factor to be considered when making a major purchase of real estate in the U.S. A major factor when deciding to purchase property in any market is primarily the current condition of the local marketplace. At this point in time, the Florida real estate market remains a bargain for Foreign buyers. Prices in many areas of the State remain at up to 60% off of former pricing. However, as FHFC has mentioned in prior newsletters, the real estate market is in full correction mode, which means that double digit price increases could be expected annually for the next few years. Given the expected rate of annual increases in Florida real estate, it is clear that the huge increases in value are nominally affected by the recent currency changes. In fact, even with todays dollar factored in, a Canadian could find a gain in value of anywhere from 10% to 20% this year if current real estate values continue to climb at the same rate as experienced over the past 12 months.

Equally as important for our clients who are buying income generating properties as investments which are cash flowing; it is extremely important to keep in mind that you will be receiving your monthly cheques in U.S. dollars. This will help to offset any losses in the Canadian dollar.

The facts are that the price increase of real estate in Florida will continue to outpace most regions of the U.S. as the move to the Sunbelt picks up at a frenzied pace. Prices are still well below market value and in many cases below the cost of replacement value. The Canadian dollar, even at .90 U.S. is still well above it’s historical average. Don’t make the mistake of making a currency decision over a real estate decision.

Florida Home Finders of Canada recommends to all of our clients that they do not play the currency game and do not wait to take advantage of these once in a lifetime prices in Florida. Rising real estate prices will quickly eat away at any changes that may or may not occur with the valuation of the Canadian Dollar.

FHFC also recommends to our clients to buy their U.S. dollars using Knightsbridge Foreign Exchange as they will save you money on the exchange. [ learn more ]

It is not too late to take advantage of this once in a lifetime market condition that allows Canadians to own a dream home or rental income property in the Sunny state of Florida.

Please feel free to contact us at 1-877-450-9980 with any questions you have.