Last Updated on October 24, 2023 by Neil Sharma
Arizona is a hotspot for Canadian real estate investors, and with optimistic news of vaccine rollouts, investment activity in Phoenix has picked up considerably.
“We received the highest ever requests for preapprovals from Canadians over the last two weeks and, because we’re connecting them to local realtors, a lot are moving forward and searching the market,” Florida-based Alain Forget, RBC Bank’s director of business development, told CREW. “It’s been building since about November and December when the first vaccine rollout announcements were made, and now as people see all the vaccinations done in Canada and the U.S., and the easing of restrictions, people are beginning to see the light at the end of the tunnel. They know 2021 will be a much better year.”
In the United States, vaccination programs have by and large been successful and it’s sparked hope of life returning to a more normal pace in 2021. That has, in turn, galvanized a lot of Canadians in Ontario, Quebec, British Columbia and Alberta to search Arizona’s Valley of the Sun for investment opportunities. Forget isn’t surprised to see savvy investors diving headlong into that particular market.
“In those Canadian provinces, there’s low inventory and multiple offers are common, which pushes prices up, but now they’re starting to realize the U.S. is an option,” he said. “Arizona has always been in the top-three destinations for Canadian investors. Scottsdale, which is on the west side of Phoenix in the Valley of the Sun, doesn’t have a lot of land but there’s been a lot of building there in recent years. It’s also very affordable. The average purchase price for Canadian investors in the U.S. is $500,000 and that buys a lot of real estate in Arizona.”
The Valley of the Sun is very business-friendly and, as a result, a lot of companies have established their bases of operation in the area, including a lot of Canadian firms. In fact, there’s a lot of active cross-border trading activity occurring with companies based specifically in Arizona, says Forget.
“It’s a growing market, in terms of demographics, and one of the top destinations in the U.S. Phoenix is a big city with lot of people and not much land on which to build,” he said.
According to Tricia Lehane, a sales agent with RE/MAX Excalibur in Phoenix, there are more than 25,000 Canadian homeowners in the Valley of the Sun. As investors, she says they operate both long-term and seasonal rental properties. In particular, the Phoenix-Mesa-Scottsdale area, known as Maricopa and Pinal counties, is hot.
“When the [Great Recession] hit, Canadians were coming here in swarms to purchase,” she said. “They continue to, and I’m sure they always will, invest in Arizona. The average price of a property in the Greater Phoenix Area is $350,000, and the population is just under 5 million.”
In particular, Canadians are partial to purchasing single-family homes as investment properties, which can average about $4,500 in monthly rent in Scottsdale, says Lehane.
“In the Greater Phoenix Area, it’s about $3,500 a month for a year-long rental,” she said. “A lot of my Canadian clients are doing seasonal rentals and they’re bringing in more money. For high-end, larger properties, a seasonal rental can bring in about $25,000 a month, and in South Scottsdale, you’d look at about $10,000-12,000 a month in the high demand season.
“Maricopa County is the third-fastest growing area in the U.S., in terms of inbound movers.”
Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
