BUYING IN FLORIDA; FINANCING VS. CASH

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. RBC expects the dollar to hover between .75 to .80 cents as compared to the U.S. Dollar over the next 18 months. 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. Even though the Canadian dollar is above its weakest point in the past dozen years, it is very close to its historical average of approximately .80 over the past 35 years.
 


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. Another factor when deciding to purchase property in any market is the current condition of the local marketplace. The Florida real estate market remains a bargain for Canadian buyers compared to owning a home in any big metropolitan Canadian city such as the GTA where the average price of a home is Approx. $1.3 million dollars.  Many of the homes in the communities that FHFC currently represents can be purchased for under $250,000 so don't make the mistake of making a currency decision over a real estate decision.

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.

FHFC recommends financing your Florida home as the best and most cost effective alternative to paying cash and reducing the impact of foreign exchange. The chart below shows the impact of paying all cash for your home and the associated exchange costs vs. financing. There is a huge savings in one time currency exchange costs when financing your home.  



Illustrative example rates provided are for information purposes only. Foreign exchange rates are subject to change at a moment’s notice. The rate used in this example was approximately $1 USD = $ 0.75 CAD.

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 ]

The price increase of real estate in Florida will continue to outpace most regions of the U.S. The move to the Sunbelt is picking up steam as the North American population continues to age and looks to Florida primarily as the best place to retire to in the U.S. Affordability and proximity along with the great Florida weather makes buying in Florida an easy decision. It's still a great time to buy!