The warm desert climate of Arizona continues to draw Canadian interest in the state's residential real estate market. A recent report from the National Association of Realtors reveals that during the period between April 2023 and March 2024, 60% of Arizona's foreign real estate buyers were Canadians, making them the largest group of international investors in the area, ABC15 reports.
With its ranking as the No. 4 destination in the U.S. for real estate investments, Arizona saw 5% of all foreign purchasers buying within its borders. Despite this influx of Canadian investment, the overall number of homes purchased by foreign buyers dropped to the lowest level since 2009, totaling 54,300, a 36% decline from the previous period. Similarly, the dollar volume of these purchases decreased by 21.2% to $42 billion, as noted in the Phoenix Business Journal.
Canada stands out as the top country for residential real estate investments in the U.S., with an aggregate of $5.9 billion across this period. Following Canada, China and Mexico both account for 11% of the foreign investment pie, with the latter coming in at 10% and Colombia at 4%, according to figures provided by the National Association of Realtors. Glenn Williamson, CEO of the Canada Arizona Business Council, highlighted a trend in younger Canadians establishing small businesses in the region. He remarked, "A lot of them like to have a second home down here. It's not just the seniors that come down and spend money," in a statement reported by the Phoenix Business Journal.
Trade relations are also thriving, with the Arizona Commerce Authority citing over $5.3 billion in trade between Arizona and Canada in 2023. The establishment of a Canadian trade office in May bolsters this connection, along with the presence of approximately 500 Canadian companies, such as BMO Bank NA and Circle K, in Arizona. Phoenix Sky Harbor International Airport reports a recovery in the demand for flights between Phoenix and Canada, showing a 43.35% increase in demand compared to 2022. "As the Canadian market continues to recover, the amount of capacity the airlines are putting in the Phoenix market is strong," said Alexandria Van Haren, air service development manager for Sky Harbor International Airport.
The preference for cash purchases by foreign buyers remains pronounced, with 69% of Canadians and 68% of Chinese investors opting for all-cash deals. This contrasts with 44% among Mexican and 42% Colombian buyers. Moreover, different national groups have varied intended uses for their U.S. properties. Nearly half of Canadian buyers sought vacation homes, compared to Asian Indian buyers, who were mostly likely to purchase residences for primary use, at 66%. The Phoenix housing market, meanwhile, has reached a state of balance not seen since 2014, with median home prices modestly increasing to $445,000 this August from $438,000 in August 2023.
