Foreign buyers bought more United States property in 2015/16 – and their top target was Florida, new data shows.
Buyers purchased 214,885 residential properties across the US in the year to March 2016, up 2.8% on the year before, according to the latest data from the National Association of Realtors.
Florida accounted for more than one in five (22%) of all sales to foreign nationals, states the 2016 Profile of Home Buying Activity in US Residential Real Estate, which has just been published. Latin Americans, Europeans and Canadians – who tend to buy in warm climates for vacation purposes – mostly sought properties in Florida.
Chinese buyers were the leading purchasers at $27.3billion, exceeding the value of the next four ranked countries combined, with $8.9billion spent by Canadians, $6.1billion by Indians and $4.8billion by Mexicans.
Overall, 102.6billion was spent on residential property, just 1.3% lower than last year, mainly due to a strong dollar and foreign economic pressures.
Foreign buyers typically spent $277,380, higher than the median price of all U.S. existing home sales of $223,058. Chinese buyers typically spend the most, with a median price of $542,084.
Lawrence Yun, NAR chief economist, says this year’s findings highlight the tremendous appeal U.S. real estate still has on many foreign nationals despite the price of property becoming less affordable. “Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence combined to present significant challenges for foreign buyers over the past year.
“While these obstacles led to a cool down in sales from non-resident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”
“Foreigners – especially those from China – continue to see the U.S. as a solid investment opportunity and an attractive place to visit and live.
“Although China’s currency modestly weakened versus the U.S. dollar in the past year, it’s much stronger than it was 5 to 10 years ago, thereby making U.S. properties still appear reasonably affordable over a longer time span.”
Garrett Kenny, Chief Executive Officer of top Central Florida developer and agency, Feltrim Group, which has a high proportion of international buyers in its luxury resorts, says education is a strong motivator for many Chinese investors.
“With around half of our homes in our newest luxury lakeside development, Balmoral at Waters Edge, being snapped up by Chinese buyers, demand from Asia continues to be strong.
“Many buyers are looking for homes near good schools, as they see the benefits of their children being educated here. Others see business opportunities of being in the Orlando region and want to take advantage of strong buy-to-let demand from the 66 million tourists the area attracts.”
A majority of foreign buyers over the past year purchased a single-family home, and nearly half bought in a suburban area, says the National Association of Realtors report.
Two–thirds or more of buyers from each China, India, Mexico and the United Kingdom purchased detached single-family homes, while Canadian buyers were the most likely to buy a multi-family home.
NAR’s 2016 Profile of Home Buying Activity in U.S. Residential Real Estate, conducted in April 2016, surveyed a sample of Realtors to measure the share of U.S. residential real estate sales to international clients, and to provide a profile of the origin, destination, and buying preferences of international clients, as well as the challenges and opportunities faced by Realtors in serving foreign clients.
The survey presents information about transactions with international clients during the 12-month period between April 2015 and March 2016. A total of 5,960 Realtors responded to the 2016 survey.
The National Association of Realtors is America’s largest trade association, representing 1.1million members involved in all aspects of the residential and commercial real estate industries.