Chinese buyers spend the most on us real estate
Photo: Fifth World Art
Total international sales of US property were worth an estimated $92.2 billion in the 12 months to March 2014, according to a new report from the National Association of Realtors, up from $68.2 billion in the previous 12 months.
Indeed, US real estate continues to be one of the most attractive in the world, having dominated activity on TheMoveChannel.com in 2014: in the first six months of the year, US property accounted for more than 1 in 4 of all enquiries on the site.
“We live in an international marketplace; so while all real estate is local, that does not mean that all property buyers are,” said NAR President Steve Browno. “Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future.”
Florida remains the most popular destination for buyers, accounting for 23 per cent of all foreign purchases. California comes in second with 14 percent, Texas with 12 percent and Arizona with 6 percent. Indeed, the four states together accounted for 55 percent of all sales. The top five cities searched online by international buyers in 2014 were Los Angeles, Miami, Las Vegas, Orlando and New York City.
Foreign buyers take many factors into consideration when deciding where to purchase abroad, says the NAR, such as proximity to their home country, the presence of relatives and friends, job and educational opportunities, and climate and location. As a rule, European buyers are generally attracted to states with warmer climates such as Florida and Arizona while the West Coast tends to attract Asian purchasers.
Most homes purchased by foreign buyers, about 42 percent, are used as a primary residence. Non-resident foreigners are limited to 6-month stays in the US, so these buyers largely use the property for vacation or rental purposes or as an investment.
Canada maintained the largest share of purchases, dropping from 23 percent in 2013 to 19 percent in 2014. China, though, is the biggest spender, splashing $22 billion on American propety with an average sale cost of $590,826.
Chinese investors are becomingly an increasingly powerful force in global real estate. Australia has recently seen an influx of investors from the country, which some have blamed for rising property prices.
According to leading Chinese site Juwai.com, though, the preference of Chinese buyers varies from city to city. In Shenzhen, for example, 61 per cent of buyers look for property in Australia, while in Harbin, 22 per cent look for property in Spain.
61 per cent of buyers in Shanghai look for property in the United States, but while this may not seem like many, they are a major player in the American market.
Indeed, China was the fastest growing source of US property transactions, now accounting for 16 per cent of all purchases, up 4 per cent from last year. Mexico ranked third with 9 per cent of sales and India and the U.K. both accounted for 5 per cent. Together, the five countries made up 54 per cent of all transactions.