The foreign US residential housing market is still growing with a 49% jump compared to last year. United States is seen as a safe haven place to live, work and invest. 44% of all foreign transactions were all-cash as well further driving up the housing prices due to lack of continued inventory. Even with the strong dollar foreigners are willing to pay a bit more to invest in the US.
Foreigners are buying US residential real estate at a record clip
Source: National Association of Realtors
A tumultuous political environment isn’t scaring international buyers from investing in US residential real estate.
Foreign
investment in US residential real estate hit a new high this year,
driven by an increase in sales dollar volume from Canadian buyers,
according to a new survey by The National Association of Realtors.
Foreign buyers and recent immigrants bought $153 billion of residential property, which represents a 49% jump from last year.
“The
political and economic uncertainty both here and abroad did not deter
foreigners from exponentially ramping up their purchases of U.S.
property over the past year,” said Lawrence Yun, NAR chief economist.
And despite a relatively strong dollar, foreigners are willing to pay a bit more to invest in the US, he said.
“While
the strengthening of the U.S. dollar in relation to other currencies
and steadfast home-price growth made buying a home more expensive in
many areas, foreigners increasingly acted on their beliefs that the U.S.
is a safe and secure place to live, work and invest.”
Foreign
investors paid, on average, $302,290, a 9% increase from the median
sales price last year. Ten percent of international buyers paid over $1
million, with 44% of transactions all-cash purchases.
Canadian interest
The survey reveals that China is still No. 1 in terms of sales dollar volume, but the overall boost in activity came from Canadian buyers.
Transactions from Canadians this year more than doubled from last year, reaching $19 billion – a new high for Canada.
Canadians
are finding that US markets though expensive are actually more
affordable than in their home country. Though home prices have been
steadily rising, gains across Canada have been steeper, especially in
Vancouver and Toronto, according to Yun.
Which countries top the list?
Chinese
investors purchased $31.7 billion this year, up from $27.3 billion last
year and $28.6 in 2015. Buyers from China also bought the most
residential units for the third consecutive year.
The
top five countries in terms of sales dollar volume after China are
Canada, the UK, Mexico and India — all saw increases from last year’s
levels.
Where are foreign investors buying?
Mirroring
the 2016 survey, investors focused on three states — Florida (22%),
California (12%) and Texas (12%). New Jersey and Arizona round out the
top five destinations for foreign buyers.
While
Florida was the most popular state for Canadian buyers, California was
the favorite among Chinese and Mexicans preferred to purchase property
in Texas.
Though
this survey reveals that foreigners are buying at robust levels,
headwinds like the shortage of homes for sale could end up denting sales
activity, according to Yun.
“Stricter
foreign government regulations and the current uncertainty on policy
surrounding U.S. immigration and international trade policy could very
well lead to a slowdown in foreign investment,” he said.
Source: https://finance.yahoo.com/news/foreigners-buying-us-residential-real-estate-record-clip-140825003.html
