Canada Surpasses China as the Top Foreign Buyer of U.S. Real Estate

A recent report has revealed that Canada has now overtaken China as the leading foreign buyer of real estate in the United States. This shift comes despite foreign buyer activity being at its slowest in 15 years.

According to RBC’s findings, which are based on the National Association of Realtors’ annual survey, international buyers were involved in U.S. real estate transactions totaling $42 billion from April 2023 to March 2024. This figure represents a 21% decline compared to the previous year. Additionally, the number of purchases by foreign buyers dropped significantly, with 54,000 transactions recorded—down 37% year-over-year.

Canada Overtakes China as Top Buyer of U.S. Real Estate

Several factors have contributed to this overall slowdown, including high inflation, a tight housing supply, and rising borrowing costs. These challenges have dampened demand across the board, particularly among foreign buyers.

Canadians Buck the Trend

Interestingly, Canadian buyers have been an exception to this trend, with their activity actually increasing. Canadians accounted for about 13% of all foreign real estate purchases in the U.S., compared to 11% by buyers from China, India, and Mexico.

In terms of total dollar value, Chinese buyers still led the pack, purchasing approximately $7.5 billion worth of U.S. real estate. However, Canadian buyers were close behind, with $5.9 billion in sales volume.

Currency and Price Factors at Play

The report also highlighted the impact of the rising U.S. dollar, which has reduced purchasing power for many international buyers. Despite this, Canadians were less affected than other foreign buyers due to the relatively smaller depreciation of their currency. The Canadian dollar fell by just 3.6%, while the Chinese yuan dropped by 9.4%.

Another key factor that likely cushioned the impact for Canadian buyers is the difference in property prices between the two countries. In Canada’s major markets, home prices are generally higher than in most U.S. cities. For instance, in June 2024, the price per square metre in Toronto was $12,504, compared to $4,760 in Los Angeles and $6,280 in Honolulu. This price disparity may have made U.S. properties more appealing to Canadian buyers, even amid challenging economic conditions.

As these trends continue to unfold, it will be interesting to see how the dynamics of foreign investment in U.S. real estate evolve.