Chinese interest in us property on the up

Foreigners continue to regard the USA as a great place to invest, reveals a study by the National Association of Realtors, with international sales accounted for by 68 different countries  - and China and Canada are leading the way.

Canadian buyers were reported to purchase properties with a median price of $183,000, with the majority purchased in Florida, Arizona and California. Chinese buyers tended to purchase property in the upper price ranges with a median price of $425,000 and typically in California.

Five have historically accounted for the bulk of purchases; Canada (23 percent), China (12 percent), Mexico (8 percent), India (5 percent) and the United Kingdom (5 percent). Together, these countries accounted for approximately 53 percent of transactions, but Canada and China are the fastest growing sources.

International home sales in the US declined in the past year, but are at their second highest level in recent years and are over six percent of total existing-home sales in value.

The survey, which asked Realtors to report their international business activity within the U.S. for the 12 months ending March 2013, showed that total international sales were $68.2 billion, down approximately $14 billion from the previous year.

The decline is attributed to a number of temporary factors, including economic slowdowns in a number of major foreign economies, tighter U.S. credit standards and unfavourable exchange rates. Of total international transactions, $34.8 billion (51 percent) were attributed to foreign buyers with permanent residences outside the U.S. and $33.4 billion (49 percent) were attributed to buyers who are recent immigrants or temporary visa holders residing for more than six months in the US.

“Foreign buyers are experiencing hurdles not only abroad, but also here in the U.S. when it comes to purchasing property,” said NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif. “Difficult economic conditions, particularly in Europe, have impacted foreign buyers, but several factors in the U.S. have also affected their purchasing power here. Tight credit standards have made financing challenging for immigrants, and low housing inventories have made finding a house difficult. However, none of these factors appear to be permanent.”

Foreign buyers continue to have a substantial interest in US property, though, with more than 70 percent of Realtors reported a constant or increasing level in the number of international clients contacting them over the past five years.

27 per cent reported having worked with international clients this year. The most important factors influencing international clients’ purchases reported by Realtors® were that the U.S. is viewed as a desirable location and that the real estate market is regarded as a profitable investment.

“Many factors influence foreign buyers’ decisions on where to purchase in the U.S., but the most important are proximity to home country, presence of relatives and friends, availability of job and education opportunities, and the climate,” said Thomas.

“International buyers also differ on the type of desired property. Some are looking for trophy properties while others are interested in modest vacation homes.”

Florida remains the most popular state for investors, accounting for 23 per cent of sales.