We interviewed Hatim Tichout, Regional Advisor in charge of cross-border banking services and real estate equity financing for RBC Bank.
Canadians are the second-largest foreign real estate investors in the United States (behind the Chinese), accounting for 14% of foreign purchases worth $6.2 billion (rolling year April 2024-March 2025, source: NAR). As Mr. Tichout explains, “That’s 10,900 properties acquired, and with the recent economic tensions, we expected to see a decline, but in reality there has been a 13% increase in Canadian purchases.” On the other hand, the median amount is down sharply by 32% from the previous year, to $437,500 from $548,600 (source: NAR).
The Regional Advisor continues: « Of course, the favorite destination for RBC clients is Florida. 80% of our transactions take place in the Sunshine State. They have several criteria for their second home: first, the climate. Second, the cost. Buying a cottage in any metropolitan area in Canada is currently very expensive. However, in the United States, there are still counties or states where it is affordable to buy a second home in the sunshine. The other advantage is proximity, with many direct flights between the two countries. »
What is the impact of the current exchange rate on Canadian buyers?
Fifty-seven percent of Canadians purchased their U.S. real estate with cash. For the others, Mr. Tichout explains, « The right way to do it is to contribute just the initial 20% down payment from their own reserves, and RBC will finance the rest in U.S. dollars. This reduces the impact of the exchange rate. And RBC mortgages can be paid off partially or in full at any time without penalty, allowing buyers to wait until the exchange rate returns to favor Canadians. » And if the U.S. investment is intended for rental, the rental income will be received by the owners in U.S. dollars. In fact, since the end of 2024 in particular, there has been an increase in younger investors (aged 30-50), who are specifically looking for rental investments that they can also enjoy with their families during their vacations.
Carefully considered purchasing decisions
It has to be love at first sight, but it also has to be profitable. The expert continues: « Canadians understand that the Florida market continues to experience some pressure on prices. Buyers know that prices have fallen by about 5%, but many believe they will fall even further, hoping for a drop of up to 20%. Pre-approval requests for loans are on the rise, and they are valid for 120 days. Many buyers are standing by, waiting for interest rates to fall and taking the time to look for the right opportunity. »
As for Florida homeowners who need cash in US dollars, for example to make major renovations to their property, there is growing demand for home equity lines of credit (HELOCs). At RBC Bank, these can be for up to 80% of the property value and provide financing in US dollars, rather than having to bring in funds in Canadian dollars.
RBC doesn’t stop at financing. Buyers are put in touch with tax lawyers to structure their title, brokers specializing in Canadian mortgages for purchases in the United States, and a platform for obtaining home insurance quotes. It’s an ideal turnkey solution for new buyers.
