Foreign House Buyers Activity Tops
By admin 2nd Aug, 2017
USA Key Markets Seeing a Surge in Foreign House Buyers
There has been a massive surge in foreign demand for properties in the USA, pushing up prices in key cities across the country, nearly a 50% jump from a year earlier, at USD153bn. The biggest house buyers were the Chinese but together with buyers from Canada, the United Kingdom, Mexico and India represents more than half of foreign activates. House price appreciation in these top 5 countries for US foreign purchasers are increasing quickly making the US housing market look attractive.
The National Association of Realtors released a report recently saying that Chinese buyers spent the most on US Real Estate but it’s the Canadian Buyers who represented the biggest increase in buyer activity. This year Canadians spent $19bn on US property which is an increase of 3 times more then the previous year.
Almost half of the purchases by foreign buyers were in Florida, California and Texas. Florida attracted the most Canadian buyers who are cashing out on expensive Canadian properties in favor of lower priced vacation homes.
Chinese buyers spent most of their money in California, while Mexicans purchased in Texas.
Would the USA Follow Canada’s Tax for Foreign House Buyers?
Recent data by the Canadian Real Estate Association pointed out sharp drops in house prices since house price monitoring started in 1988. With interest rate rises for the first time in 7 years, it is having an effect by slowing the housing market.
The once boiling Real Estate market in Canada is showing signs of cooling off.
House sales in Toronto are at their lowest levels since 2010, with price drops averaging 14.2%.
The Canadian Government had concerns that continued sharp increase in house prices would lead to a crisis in some local markets and took steps to cool the Real Estate market by toughening lending criteria and the introduction of a 15% tax on foreign investors in British Colombia and Ontario.
House Buyers target affordable Houses in the USA
At this stage, we don’t think the US will introduce nationwide Tax to foreigner buyers. But local, state governed tax maybe introduced in the future.
At the same time when foreign house buyers push prices up, and while these key cities seen above, have average house price inflation, there are still many affordable markets in the US where locals,USA House Buyers and investors can buy at affordable prices. Cities like Houston Texas, Memphis Tennessee, Little Rock Arkansas and Jacksonville Florida have many affordable homes with a reasonable rent-to-rice ratio. In these and many other markets in America it is possible to purchase cash flow investment properties, and for that reason they are attractive to many Real Estate investors.Your rating: noneRating: 4.5 - 1 vote