With the exchange rate currently hovering around $1.30 Canadian for every U.S. dollar, buyers south of the border are increasingly looking at Canadian cottages and other recreational properties as a bargain. This spring and summer, realtors have noticed a definite uptick in U.S. buyers, particular in the country’s most desirable holiday destinations.
What realtors are saying
“I’ve had eight enquiries so far this year [from U.S. buyers]. That’s considerably more than usual,” says Heather Scott, a Re/Max agent based in the heart of Ontario’s Muskoka Lakes region, during a phone interview in early July. “In fact, I’m meeting with one later today.”
While many of the inquiries she gets are from bordering New York State, she’s taken calls from as far away as West Virginia, Kentucky and even California. Given the distance between home and their potential cottage, buyers are taking advantage of detailed online listings that often feature 360-degree views of rooms and the lot, as well as short video clips.
Scott enhances the options by taking her own pictures and videos when visiting properties, “including showing what the neighbouring property looks like.” Still, she was surprised when one U.S. buyer closed the deal without ever visiting the site. “I was terrified,” she says, but when the buyer arrived for a first visit it was exactly what he’d envisioned.
With the extremely long-distance commute in mind, many of these buyers plan to spend the entire summer at the cottage, with some using regional airlines to expedite the trip north.
The hot market isn’t limited to Ontario’s most famous cottage region. In it’s annual Recreational Property Report, Re/Max quoted agents fielding increased interest in camps, cabins and chalets from Whistler, B.C., to Cape Breton Island, Manitoulin Island and Mont Tremblant in between.
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For its 2016 Canadian Recreational Housing Report, Royal LePage surveyed members for their thoughts on why U.S. buyers were expressing interest in Canadian property and the answer was an almost even split between quality of living in Canada (30 per cent), geography (27 per cent) and the low Canadian dollar (27 per cent).
Realtors are also seeing the trend in reverse, with Canadians who own U.S. properties selling those and using the four-for-the-price-of-three exchange rate to buy something closer to home.
Even owners of Canadian properties with no interest in selling are capitalizing on excess U.S. capital by renting out their cottages to U.S.-based clientele who enjoy what amounts to a 30% discount on weekly or monthly rates.
Canada previously saw a similar influx of foreign buyers in cottage country was after the dollar dipped down to 62 cents US in the 1990s. Another Re/Max realtor, Pamela Alexander, recently told the Globe and Mail that what happens over the next six months depends on the direction of the North American economy. But with borrowing rates still hovering at historic low levels, Americans will likely continue to cash in on deals right through the end of the year.
Heading north over the coming weeks for some much deserved R&R? Check out our guide for hitting cottage country the right way!