New figures show that the number of foreign buyers purchasing homes in the United States has plunged over the last year.
The latest National Association of Realtors (NAR) data shows that the dollar volume of homes purchased by foreign buyers between April 2018 and March 2019 dropped by 36 per cent from the previous year.
Challenging conditions in the US housing market, along with tighter currency controls by the Chinese government (China is the lead source country for overseas purchasers in the US market), were given as the main reason for the significant drop in foreign demand for American homes.
The data shows that foreign buyers paid a median price of US$280,600 for a US home in this period. While this is higher than the median for all existing homebuyers (US$259,600), it was down from the median US$290,400 spent by foreign buyers the previous year.
“A confluence of many factors – slower economic growth abroad, tighter capital controls in China, a stronger US dollar and a low inventory of homes for sale – contributed to the pullback of foreign buyers,” said Lawrence Yun, NAR’s chief economist. “However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the US.”
Chinese investors purchased an estimated US$13.4 billion worth of residential property during this period; a 56 per cent decline from the previous 12 months and comparatively the biggest percentage drop of all foreign buyers.
Chinese buyers were followed by Canadians (US$8 billion), Asian Indians (US$6.9 billion), UK buyers (US$3.8 billion) and Mexican buyers (US$2.3 billion).
In this instance, foreign buyers include those living in the United States and overseas, but the majority (60 per cent) were recent immigrants and foreigners who live in the US for work, school or other reasons.
Article published 18th July 2019