The amount of cash coming back into Canada as a result of U.S. home sales is up almost 100% year-over-year, according to OzForex, a currency-trading company.
What does this indicator mean? More Canadian snowbirds are selling their U.S. properties and moving back home, reports Financial Post.
One reason Canadians are cashing out could be due to the falling loonie and rising U.S. home prices. Suzanne Sharma, Advisor Group’s associate managing editor, notes that because the loonie is no longer on par with the U.S. dollar, some Canadians may no longer be able to afford the carrying costs to own a U.S. home.
She spoke to David Chalmers, financial advisor at Nicola Wealth Management, who explains that many clients will now have three options: continue to service the loan, rent out the property, or sell.
If the latter is the best option, he’d tell the clients, “The drop in the Canadian dollar was bad news for you in terms of carrying costs. But it’s good news in terms of selling because, even after paying selling costs and capital gains tax, you’ll still make money.”