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Why Canadians Are Giving Florida Another Look


Raleigh, N.C. – December 15, 2010 When Alain Forget, director of RBC Bank’s US-based Cross Border Banking Segment, contemplated a series of seminars to brief Montreal and Toronto residents on some important nuances of buying Florida real estate, he had no idea how popular the 2-hour events would be. As it turns out, they were standing-room-only with lots of Q&A.

Forget invited Florida-based experts in real estate, law and tax as well as foreign exchange professionals to speak at a series of invitation-only, in-person seminars in Canada this fall. For the Montreal seminars held in late September and October, middle-class to high-net-worth Canadians filled a total of 1,000 seats to learn about Florida real estate. That response prompted Forget to schedule additional dates, including Toronto this fall. More than 80 percent of the initial series attendees said they did not yet own Florida property and more than half said they were actively considering buying. From these 2010 sessions the Canadian attendees asked questions and voiced some common themes. Here are a few highlights:

Why Now?
Younger Baby Boomers in their mid-40s to mid-50s are reaching the age when some are taking active steps toward retirement. For many, that means looking for a house in a warm climate with lots of amenities from which to choose. In the last two years U.S. prices have been falling; but it seems that prices are now stabilizing and the window of opportunity is open. For the Canadians who are considering retirement in three to five years, the return on their investment looks favorable to purchase a Florida property for $150,000 to $200,000 that two years ago sold for $350,000 to $450,000. These new buyers will also likely find familiar accents in their new Florida neighborhood. One speaker told the attendees that of 200 properties his firm sold recently in a Florida development, 100 were to Canadian buyers.

Dollar for Dollar, It’s A Very Tempting Opportunity
The exchange rate for the Canadian dollar and the U.S. dollar is close to par. Movement of a few percentage points makes a substantial difference in a purchase of $200,000. There may be no better time to take advantage of the favorable exchange rate in combination with historically low mortgage interest rates and a choice of properties at affordable prices. Understanding the process for locking in a current exchange rate for a period in the future, for example, can make a difference of tens of thousands of dollars when it is time to close on a new property.

Short Sales and Foreclosures Draw Attention
The prospect of getting a tremendous bargain, which a foreclosure may represent, is offset to an extent by the length of time and complexity of the process required to buy in a short sale or to purchase a foreclosed property. The appeal of capturing the very best deal also extends to different geographies around the state. Understanding West Coast vs East Coast and Northern vs Southern markets is very important in weighing cost and value, but is not easy from 2,000 miles away.

Homeowners Associations offer prospects of Convenience, Choice and Confusion
A property might have a low purchase price, but require a significant monthly fee paid to the homeowners association. Understanding those HOA fees and what they cover can increase the comfort level for prospective buyers and help them establish realistic budgets.

Lifestyle Is Key
For some buyers, a condominium with no frills, but plenty of access to the sun and surf is just the right fit. For others, the gated community offering golf, tennis, pools and other club amenities makes the decision easy. The Florida market provides both kinds of properties – and others in between. But for prospective buyers who are just starting the process and who want to know the implications of cross border tax issues, immigration restrictions and other critical information, the decisions about the vacation and retirement home are complex.

The popularity of the Canadian seminars signals a brighter future for Florida investment by younger Canadians and sends the message that these prospective buyers are hungry for professionals with Florida knowledge and Canadian experience. For more information about Cross Border Banking and related resources, contact Alain Forget at 516-443-5432.

About RBC Bank

RBC Bank, headquartered in Raleigh, N.C., offers a wide range of financial services and advice to individuals, businesses and public institutions throughout the Southeast. RBC Bank’s network includes more than 420 full-service banking centers in six states (Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia), an extensive ATM network and telephone and online banking. RBC Bank is the 40th largest U.S. bank by consolidated assets, according to SNL Financial’s List of the Nation’s 50 Largest Banks, September 2010. RBC Bank is a wholly-owned subsidiary of Royal Bank of Canada (RBC) (RY on the TSX and NYSE), Canada's largest and most stable bank as measured by assets and market capitalization. In August 2009, Global Finance Magazine ranked RBC as the safest bank in the Western Hemisphere. RBC is also one of the world's financial, social and environmental corporate leaders, having appeared on the Dow Jones Sustainability World Index every year since its creation in 1999. Additional information about RBC Bank may be found at www.rbcbankusa.com.