In the year to March 2017, overseas buyers acquired 284,455 residential properties in the USA, according to the National Association of Realtors (NAR). They spent $153 billion, up by an astonishing 49% year on year to an all-time high.
The median price paid was $302,290, and 44% of all transactions were made in cash. Nearly half of all these overseas sales were made in three states: California, Texas and Florida. But what is it that investors find so appealing about the USA in the first place?
1) Financial opportunity
America is one of the richest nations on earth. There are obvious economic benefits in a US property investment, such as the establishment of income streams in US dollars and excellent capital growth prospects – 46% of respondents to the latest Association of Foreign Investors in Real Estate (AFIRE) survey believed capital appreciation opportunities were best in the USA.
2) Economic safety
66% of those surveyed by AFIRE agreed that the USA provides the most secure and stable property investments. While yields at home or elsewhere overseas may be higher, overseas investors appreciate that the USA’s strictly regulated real estate market can offer a trustworthy hedge against some of their investments in other, possibly riskier locations.
3) Stable governance
Political stability is vital to any investor. Many of the booming BRICS economies (Brazil, Russia, India, China, South Africa), while certainly creating extraordinary wealth, are built on thus-far unproven political systems, which can leave a nagging doubt in an investor’s mind. The USA’s political system, if not all its individual politicians, is inherently stable when compared with many others around the world.
4) A personal refuge
Real estate analysts Inman have identified a fourth, hybrid benefit – “It is the alignment of economic and/or political considerations by the high net worth individual with the recognition that a property or properties in the U.S. could be personally useful as a temporary or permanent home.”
It’s apparent that the USA offers a very desirable balance of economic opportunity allied to economic and political stability with an acknowledgement of the rights of the individual. It’s also a great place to visit or to live.
Author: Lawrence Yun