The number of international buyers in the U.S. property sector is rising, reports the Chinese magazine Time Weekly. According to statistics released by the U.S. National Association of Realtors (NAR), overseas buyers account for 8.9 percent of total U.S. home sales. During the past year, beginning in March 2011, foreign nationals have bought $82.5 billion worth of homes in the U.S. These purchases increased 24 percent year-over-year, and may be contributing to the nascent U.S. housing recovery.
Mostly Canadian and Chinese Buyers
The NAR group’s statistics also show that the majority of international buyers come from Canada and China. Canadian buyers spent $19.8 billion on U.S. homes and properties, the most by any one country. China tailed Canada with over $9 billion spent on properties in the U.S. Other nations, from Mexico and India to the United Kingdom, make up 55 percent of international sales in the U.S. real estate market.
Since spring of 2011, international buyers have discerned American properties to be a worthwhile investment, due to low prices and the weakness of the dollar. “Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi.
Immigration and Property Ownership
The reason many foreign national investors are looking to the U.S. for their next property crop results from growing immigration. Over 75 percent of applications for the U.S. immigrant investor program were Chinese nationals looking to own property and eventually emigrate to the U.S., so their children can benefit from a U.S. education and enroll in acclaimed U.S. universities. The program encourages foreign investors by providing citizenship and residence rights in the U.S., and the foreign capital is helping to bolster the housing market’s recovery.
A Boost for Real Estate Agents
The growing demand from international buyers for U.S. properties has benefited many real estate agents, especially in places like Boston, Mass., an area populated with Ivy League universities. Foreign nationals are turning to real estate agents not just to be brokers in the buying process. They need real estate agents to manage and maintain purchased properties, too.
There are many reasons why foreign buyers want to own a home in the U.S. The most obvious are financial benefits, since property can be a profitable investment and owning property is a way to diversify a financial portfolio. Immigrants also view owning a home as important for social collateral, offering stability, security, and ties to the local community. Other investors purchase homes as a vacation property or a source of income from rentals.
The average price paid for a home by an international buyer was $400,000, double the average price paid by domestic buyers. Additionally, there appears to be a growing trend of purchases made in the $250,000 to $500,000 range, which suggests that international clients are wealthier than domestic buyers and want properties that establish social clout in a community.
Foreign Buyers Flood U.S. Housing Market in Search of Bargains