Foreign investment in U.S. real estate on the rise

Overseas buyers continue to look at potential US real estate investment options.  In 2017, a record of 284,500 residential units were sold to foreign buyers. According to CBRE Capital Watch, 25% of foreign investors say access to available properties was the main obstacle to investing in the U.S.

There is a mix of foreign investors. There are the Chinese buyers who look to buy an American home for living purposes or for their child to go to school in one of the many good school districts. Canadian buyers seem to have become another favorite buyer.  Apparently the reasons for those Canadians to buy real estate in the US is very much linked to pure investment. This can also been seen in the data that many Canadians not only buy American houses but also sell those house, clearly with an objective to make a profit.

According to the National Association of Realtors, the top markets that foreign buyers are searching for are Miami; Los Angeles; Bellingham (in Washington), Kahului-Wailuku-Lahaina ( in Hawaii) and New York City. All of those markets are hot spots for Chinese buyers.

Chinese buyers topped the list of foreign investors in dollar volume, with an estimated $32 billion invested into U.S. real estate in 2017. Canadians were second on the list but they only spent $19 billion on American real estate investments. Despite the massive gap in dollar volume, Canadians purchased almost the same number of homes (namely 33,819 homes).

The average Chinese buyer spent $781,801, while the average Canadian buyer spent $560,844. The average American spends just over $277,733 on a home. Clearly foreign buyers are more keen on buying larger/more expensive units across the US.

(photo credit: SCMP)