Foreign Sales Increasing In American Property Market
News Posted On: 26 May 2011
US property purchases by international buyers have increased to $16 billion this year, the largest increase for several years according to new data from the National Association of Realtors.
Properties are being bought up by immigrants and non-resident foreigners, who are seeing the US as a good market in which to invest due to the large inventory and low prices. The US market has the added advantage of good long-term capital growth potential and excellent rental opportunities.
Estate agents in the US have also noticed increasing numbers of foreigners buying properties for children who are studying in the US, and also executives that are to be based stateside for one or more years, as it is currently more cost effective to buy than it is to rent.
Another draw is the weak dollar, which is making the price reductions even greater for most nationalities. This includes Canadians who were responsible for 23% of foreign purchases, and the Chinese who made 9% of the purchases.
The average price paid by a foreign purchaser was $315,000 which is considerably higher than the US average of $218,000.
Florida is still the most popular state, followed by California, Texas and Arizona. This is mainly due to the main priorities of buyers, which are convenience of air travel, climate and the proximity to their home country.
The NAR report also highlighted the continued difficulties of foreigners obtaining finance, with a whopping 62% of foreign purchases being paid for entirely in cash. This is obviously a hindrance on what could be a helper in the American housing recovery, albeit probably a temporary assist as we have seen in the UK and elsewhere.
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