Finding a home within a decent commuting distance used to be the dream before the pandemic. In 2021 and 2022, freed from the necessity to show up to the office every day, homebuyers all across Canada quickly replaced this dream with another one: Finding the best home that money could buy in the ideal location, no matter how far from work.
But is this still the case for home seekers in 2023? Canadian homebuyers are still looking for “homes for sale in Mexico,” “houses in the U.S.” and “beachfront properties in Costa Rica.” However, the financial uncertainty from the previous 12 months has taken a toll on buyers’ interest: The number of searches fell in 23 of the 30 most wanted destinations for homebuyers.
So, to discover the most desirable homebuying destinations and see how buyers’ preferences have changed compared to last year’s report, we analyzed what home seekers are searching for, looking at more than 2,000 real estate-related keywords in islands, countries and cities in the Americas. Here are the main findings:
- Mexico reinforces its supremacy, with Costa Rica and the U.S. rounding out the podium.
- Although they stayed the same, the top 3 countries all experienced significant decreases in the number of searches compared to the previous 12 months, with the U.S. recording the most dramatic drop at -40%.
- In fact, interest in vacation homes and investment properties decreased in 23 of the 30 most desirable locations in the Americas.
Mexico, Costa Rica & U.S. Remain Canadian Homebuyers’ Favorites, but Searches Slide
Although the same three countries occupy the podium as last year, not only has their order changed, but the number of searches dropped in all three. In fact, the 40% decrease in searches for U.S. properties was significant enough to bump Canada’s southern neighbor to the third place. This means Costa Rica is the new runner up.
But this is just the tip of the iceberg. Interest dropped in eight of the top 10 most wanted locations for vacation homes and investment properties. Looking at the extended ranking, the number of real estate-related searches fell in 23 of the 30 best homebuying locations in the Americas, showing that Canadian buyers are definitely more reluctant when it comes to properties abroad.
Few other countries and territories in the top 30 most wanted destinations recorded drops steeper than U.S.’s. Not to mention, the search volumes for homes in desirable American cities and states like New York; Hawaii; Las Vegas; Miami and Florida are much more significant than in entire other countries, making the retraction even more impactful.
And if searches for U.S. properties are down quite significantly compared to the previous 12 months, so are actual transactions. According to an August report by the National Association of REALTORS®, the “number of existing homes bought by international buyers declined to 84,600 – the fewest since 2009.”
The report states that Canada is second only to China when it comes to residential sales dollar volume:
“China and Canada remained first and second in U.S. residential sales dollar volume at $13.6 billion and $6.6 billion, respectively, continuing a trend going back to 2013.”
But, despite the most recent numbers, NAR economists remain positive:
“Sharply lower housing inventory in the U.S. and higher borrowing costs across the world have dented international buyers for two straight years,” said NAR Chief Economist Lawrence Yun. “However, recovering international travel following the end of the pandemic will bring more foreign transactions in coming months and years.”
Who Is the Canadian Buyer Looking for a Vacation Home in Mexico?
Drawn to spots like Puerto Vallarta; Tulum; Playa del Carmen; Huatulco and Merida, Canadian home seekers looking for properties in Mexico don’t seem too picky when it comes to the type of home they prefer: At around 48% and 45%, respectively, searches for houses and condos boast almost equal shares in the total number of searches.
What stands out is the share of people looking to buy land: Whether these are families looking to build their perfect home or investors, searches related to vacant land for sale in Mexico represent around 6% of all the real estate-related searches.
User behavior and demographic data on our portal reveal that the typical Canadian buyer browsing Mexico’s listings is most probably a Gen X buyer, interested in houses for sale. Almost 6 in 10 home seekers are men and most of the searches (21.24%) are performed by buyers in the 45-54 age group.
The surprising part is that young and older Millennials (the 25 to 34 and 35 to 44 age brackets) are driving traffic to Mexico’s real estate pages more than retirees: People aged 65 and over, who might be interested in warmer climate areas to search and buy a home for retirement are outnumbered by their much younger peers.
Methodology
Point2, a division of Yardi Systems Inc., covers real estate trends and news. Point2 studies are based on internal data, public records, governmental sources, online research and other reliable third-party agencies.
- To discover the most-searched destinations for Canadians who were looking to buy property abroad, we analyzed more than 2,000 keywords related to real estate in combination with all of the countries and territories from the Americas.
- We used Ahrefs.com to extract the average number of searches per month, for the past 12 months (June 2022 to June 2023).
- We then ranked these locations based on their accumulated number of searches.
- For this study, we analyzed the same keywords, during the same periods of time as in previous editions (2015, 2018, 2021 and 2022) to be able to accurately assess and compare the evolution of homebuyers’ interest.
- To discover the profile of the Canadian homebuyer in Mexico, we analyzed search patterns on our portal. User behavior and demographic data were based on searches conducted over the last year, between July 1st, 2022 and June 30th 2023 by users located within Canada.
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