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Weak Loonie Lures U.S. Home Buyers to Canada

When Brian Campbell first heard about an eight-bedroom home for sale in the Canadian resort community of Mont-Tremblant, the Miami-based businessman dismissed the idea. He already owned one rental property in the area and he wasn’t in the market for another.

But he changed his mind after looking at the numbers more closely—including the price in American dollars. “I said ‘Holy moly, you’ve got to be kidding me,’” Mr. Campbell recalled. “In Miami our prices have all doubled, and this, it’s a gift.”

The Canadian dollar, known as the loonie for the engraved bird on its back, fell sharply against the U.S. dollar in 2015 and the early part of this year. Although it has regained some of its value in recent weeks, the loonie is still about 24% below its early 2013 levels, when the two currencies were close to par.

For many Americans this means bigger bargains in Canada’s vacation home market. While Canada doesn’t track data on home buyers’ citizenship, Realtors in many resort communities have noticed a surge in American visitors over the past year. They say more Americans are now returning to purchase vacation homes.

“All of a sudden the phone has started ringing,” said Christopher Vincent, with Sotheby’s International Realty Canada in Canmore, Alberta, a small community located about an hour from Calgary and 15 minutes from Banff National Park. “It’s been almost a decade since we’ve seen any significant interest from the U.S. market.”

Mr. Vincent said his team brokered one firm sale to an American couple so far this year and is currently working with six other potential buyers from the U.S. They expect those numbers to grow as the tourism season picks up this summer. One of their clients wasCecilia Padilla, president of a software company in the Woodlands, Texas, who had been looking for a second home in the mountains with her husband.

Ms. Padilla said the couple began by looking at locations such as Colorado, Montana and Idaho before her husband suggested Canada’s western province of Alberta. The two had vacationed there several years earlier and were pleasantly surprised to see what they could get for their money. In March, their offer was accepted on a three-story townhouse in Canmore for just under one million Canadian dollars ($768,500).

“Obviously if the dollar had been at par, that might not have been the decision we would have made for a second home,” Ms. Padilla said. “It made it affordable for us.”

To be sure, American buyers still make up a small portion of the overall real-estate market in Canada. There is no stampede as some Canadians fear, said Liz Forster, who is managing broker of the Sotheby’s office in Sun Peaks, a ski resort community located about six hours north of Seattle. In reality the uptick has been much more modest, she said.

That impression might be helping to boost domestic sales, she said. “Because people perceive that they’re in competition with the U.S. buyer [they think] they’d better hurry up and buy,” Ms. Forster said, adding that she is seeing more urgency from Canadians who had been looking at real estate casually in recent years. “Now there’s a general perception that if they don’t buy now the price is going up.”

Jennifer McKeown, who owns Mont Tremblant Real Estate in Quebec and worked with Mr. Campbell on his recent purchase, said she has worked with several American clients in recent months. “I think they’re just catching on now,” Ms. McKeown said of U.S. buyers. “I think what happens is that they come here on vacation and they realize how much they’re saving on their meals, on their lodging, and then it sort of gets in their minds: ‘Imagine if we bought a property here.’”

Statistics Canada data shows that overnight trips by U.S. residents to Canada were up about 8% in 2015 compared with the previous year.

Ms. McKeown said she recently took out an advertisement in a local Mont-Tremblant newspaper listing properties in American as well as Canadian dollars to attract the attention of some of the town’s U.S. visitors. “The last time our dollar was as low as this, we used to have a joke: Buy three and you get one free,” she said. “And seriously, people were seriously buying three.”

Mr. Campbell, the Miami businessman who now owns two properties in the Quebec town, said he expects the weaker loonie means more Canadians are likely to take their holidays closer to home as well—something that could boost demand for his rental properties. He is renovating the new house now and expects to start renting it out this summer. “It’s a trophy asset,” he said, adding, “I bought it for a song.”

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