Utilizing second mortgages, or otherwise tapping into existing home equity, “Albertans are twice as likely to look for a vacation home compared to other Canadians (13 per cent versus 5 per cent nationally),” reports Canadian Real Estate Magazine, citing a recently released TD Canada Trust Repeat Home Buyers Report. Another six percent of Albertans are in the market for a rental property according to the TD report.
Many Albertans, it seems (based on reports in USA Today) are looking south of the border for vacation properties, Arizona being a preferred destination for much of this capital flow. Arizona’s deflated housing markets have become a favourite destination for Canadians seeking to purchase a second home in warmer climes.
USA Today reports that Canadians have become the top out-of-state purchaser’s of Phoenix-area real estate, surpassing next-door-neighbour Californians. The rapid increase in Canadian purchases is attributed to the surging Canadian loonie that has surpassed par with the U.S. dollar, while “home prices in the Phoenix area have dropped about 50% from their peak in early 2007.”
Bottoms in U.S.-Sunbelt real estate markets coincide with a renewal in Canadian (particularly, Albertan) economic growth. Craig Alexander, chief economist at TD-Canada Trust, told reporters at Calgary’s Economic Development 2011 conference that economic growth in Calgary “will outshine even the nation-leading forecast released by the Conference Board of Canada [last] week.”
“The direction is up,” Alexander noted, “but let’s remember the level. The level is continued, low interest rates for quite a long period of time.” Yet, even with higher interest rates, “rates will still be low enough to allow businesses to buy machinery and equipment and consumers to make big-ticket purchases such as homes.”
Albertans shopping for a second mortgage to finance a vacation property in the Sunbelt should talk to an Alberta mortgage broker for the lowest rates available in a continuing low rate environment.
