Strong currency, tax benefits, and lifestyle gains lure Canadians South
Managing financial risk is critical to investment success
SAN FRANCISCO, Aug. 24 /CNW/ -- According to HiFX, one of the largest
providers of foreign exchange services to individuals and businesses,
Canadians are more actively purchasing homes in Central America and Mexico.
HiFX surveyed more than 100 agents in Mexico, Nicaragua and Costa Rica,
and found that nearly 30 percent of all real estate clients in these regions
are Canadian. Broken out by country, more than 32 percent of the clients
purchasing in Mexico are Canadian, 27 percent of clients purchasing in
Nicaragua are Canadian, and 26 percent of purchasers in Costa Rica are
Jaime Niembro, owner of Ajijic Real Estate based in Western Mexico
stated, "I've experienced the trend of Canadians purchasing real estate in
Mexico and Central America first hand, and based on continued favorable market
conditions, I expect this trend to continue, and perhaps even pick up steam in
Ward Naughton, president of HiFX stated, "Various factors are coming
together to make Central America an increasingly popular destination for savvy
Canadians with a global mindset." Naughton continued, "The strength of the
Canadian dollar is making purchases in Central America increasingly
attractive, and meanwhile you are in some of the most naturally beautiful
regions of the world."
Managing Financial Risks
While there are tremendous benefits to purchasing foreign property,
investors should plan carefully and consider the currency risks associated
with buying a property abroad. Currency fluctuation can have a significant
impact on the total amount of money you pay to purchase your investment.
Here is an example that demonstrates the impact that currency can have on
a real estate purchase, as well as the good real estate values that Canadians
can find in Central America and Mexico:
If you had considered purchasing a property in Mexico priced at $500,000
U.S. dollars at the beginning of January 2007, it would have cost you
$592,000 Canadian dollars. Meanwhile, if you looked at that same property
now, just seven months later, it would only cost $528,000 Canadian
dollars, an 11 percent discount due to currency fluctuations.
Reflecting the strength of the U.S. dollar five years ago, the same
property would have cost a staggering $809,000 Canadian dollars in 2002.
In other words, the same property is now $281,000 Canadian dollars (or 35
percent) cheaper than it was five years ago.
Douglas Johnson, head of HiFX's private client division stated, "If you
are a Canadian looking to buy property in Mexico or Central American
countries, you will most likely need to transfer your currency into U.S.
dollars in order to purchase the property and arrange financing. It is very
important to pay attention to the exchange rate for your payments, or it could
end up costing you a lot of money."
Johnson continued, "Even though Canadian property is a very good value
right now, financial risk management should always be part of the planning
process. It is also important to handle the real estate, mortgage, legal and
tax aspects of your purchase very carefully. HiFX partners with experts in all
of these areas to provide its clients with a full range of consultative
HiFX provides foreign exchange advisory services to individual and
corporate clients. Its network of offices in North America, UK, Europe, and
Australasia manages $35 billion in corporate foreign exchange transactions
annually. HiFX is trusted by more than 2,000 companies in more than 100
different industry sectors from airlines to major technology companies. The
company website can be found at http://www.hifx.com.
For further information:
For further information: Jessica Heine of Edelman, +1-415-486-3234,
Jessica.firstname.lastname@example.org, for HiFX Web Site: http://www.hifx.com