An increasing number of foreign investors are becoming a key factor in driving the US real estate market forward. They are attracted by the low real estate prices and the opportunity of gaining residency in the US.
The recovery that the US real estate market is currently experiencing is obviously not only the result of foreign funds. However, certain areas such as Florida, for example, are experiencing growth in their real estate markets particularly because of overseas investments.
Based on Garrett Kenny, CEO of Century 21 Team Feltrim, “The property Market in Florida is booming and we are seeing upcoming growth appearing all over the state. This includes a strong Canadian interest in Florida’s property market.”
Whilst Canadians remain the largest group of foreign buyers of US real estate, Chinese are becoming the most important foreign buyers. These buyers, who are much more wealthy because of China’s healthier economy, are keen to get their hands on US real estate. As a result, they are purchasing high-end and high-priced homes in desirable areas in California, New York and Florida. As a result, Century 21 Team Feltrim has been making several trips to Asia over the last couple of years to build relationships with Chinese real estate agents and present them opportunities around Florida real estate.
Chinese are interested in buying homes in the USA as their money can relatively buy a larger house than in China. For example, a two-bedroom apartment in Shanghai can cost more than $2 million. Florida’s real estate market is almost cheap in comparison, with the average three-bedroom home in Clermont, Lake County, which is selling for around $200K.
But value is just one factor driving the interest of Chinese buyers. Equally important for them is the status that they gain from owning a house in the USA. Betty Chan, a Las Vegas-based real estate agent who deals with Chinese buyers indicates that buying a home in America is something they can show off about to their friends. “It’s a sign of status. You can show off that you can afford to buy something overseas, it’s not something that everyone can do.” “Most Chinese like to own a Mercedes… It doesn’t matter if it’s a good car or not, it’s just showing off their status. In the same light, owning a foreign house is just as prestigious in China, so they’re proud to tell their friends.”
Source: Realty Biz News, May 2013