Canadian investors swooped into the Phoenix real estate market like hawks during the Great Recession, but have been migrating back north.
A few years ago, Phoenix had so many visitors from the great white north – topping 1 million in 2015 alone per the Arizona Lodging and Tourism Association – and so many snowbirds purchasing second homes and investment properties here, you’d have thought they were colonizing us.
“A pool and a palm tree [are] pretty much heaven to a Canadian,” says Diane Brennan, an Alberta expat and realtor in Scottsdale. That idyll goes a long way in explaining why people from the Land of Ehs and Polite Chit-Chat flock here come November. So, too, does the formerly fantastic exchange rate of the Canadian dollar. In 2011 and 2012, one Canadian loonie averaged about 1.01 U.S. dollars, according to online foreign exchange OFX, allowing Canadians to scoop up discounted and foreclosed homes (with pools, of course) in droves during the recession. “Canadians really helped when the market crashed here,” Brennan says. “They bought property, furniture, groceries… kept local businesses afloat.”
“Formerly” is the key word. Now that our economy has improved, the exchange rate has dipped back in the dollar’s favor (1 CAD = 0.77 USD). Moreover, oil and gas spending – Canada is the world’s fourth largest oil exporter – has fallen for the fourth straight year. The upshot: Canadians are migrating back home.
This past April, the number of home sales to Canadian buyers in Maricopa and Pinal counties hit the lowest level since the beginning of the Great Recession in 2009, according to local real estate analyst The Cromford Report. “The number of sales has exceeded the number of purchases every month since February 2015,” says Cromford founder Mike Orr. “The net change over that time represents a loss of 4,658 Canadian [home] owners [in the Valley].”
So where are the Canadians going? Back home, it seems, to cash out on Arizona’s sellers’ market in a sort of reverse exchange rate loophole. Broker and author of The Arizona Report blog David Meek says, “Canadian investors are selling… and repatriating those [U.S.] dollars to the weakened Canadian currency.” Smart move, he says, since “Canadians who got into Phoenix real estate around 2010 and out around 2017-18, they’ve done very well at both ends of the transaction.”