A surge in foreign investment and its effect on Real Estate
It is every country’s dream to acquire more foreign investment. Having more foreign investors’ means that the country is safe to invest in and the market is less likely to be volatile because of the foreign exchange being in-fluxed in a county’s economy.
The US dollar is becoming stronger day-by-day. More and more money is flowing in the state reserves every year. As a result of this, the dollar is gaining power over all other currencies-rendering them volatile. Because of this situation more people turn to investing into the United States in order to make a safe investment. In this piece, we will look at the foreign investment in the real estate market of the US. According to the Profile of International Activity in US Residential Real Estate by the National Association of Real Estate report; more and more people belonging to other countries are buying real estate in our land. This is resulting in a boom of the real estate industry.
Here are some key highlights from the report that will help real estate agents in placing themselves according to the market:
Major Buyers
Although it is an open ground, i.e., anyone can own a property in the United States as long as they are eligible for it. It has been observed that most of these buyers come from the following countries:
- China(($27.0B)
- Canada($8.9B)
- India ($6.1B)
- United Kingdom ($5.5B)
- Mexico ($4.8B)
Looking at these stats; as a real estate agent you need to place yourself in good terms with people from these nationalities in order to make better sales.
Buyer type shift in Real estate
According to this report, from April 2015 to March 2016, more people who are formal residents of the US, but belong to a foreign land have purchased more of real estate than the ones who are non-residents. In the past this number was observed to be spilled evenly. Moreover, the number of properties purchased by resident foreign buyer was cheaper but more in number as compared to the previous stats.
Foreign Buyer Sales
The the states, an existing home sells at a median price of $233,058. But when it comes to foreign buyer purchased home, this value hikes up to $277,380. Whereas, it is implied in the report that since the resident buyer is purchasing at a relatively lower cost, the non-resident buyer still has to pay more. Due to the much difference in prices, it would be good for a real estate agent to get going on with the deals they broker to a foreign client and look for a long term relation with them.
Which states are leading in terms of foreign investment?
It is stated in the report that more than 50% of the foreign buyers are focused on buying real estate in the following provinces:
- Florida (22 percent)
- California (15 percent)
- Texas (10 percent)
- Arizona (4 percent)
- New York (4 percent)
Takeaway: so we hope that this data was of importance to you. The influx of foreign investment in real estate can help you be more niche specific. This can also mean that if you know someone from the above mentioned state you can probably help them make more money by looking for a foreign buyer.