UK and EU citizens are continuing to invest heavily in US residential property, new figures reveal. Foreign buyers closed $153 billion worth of deals in the 12 months to March 2017, representing a massive rise of 49% compared to 2015-16. Non-US citizens were responsible for 10% of all existing home purchases by total dollar volume, and 5% according to the number of properties – 284,455 homes – up 32% on 2016.
Chinese buyers led the way for the fourth year in a row, with Canadians in second spot and British buyers in third at around 6%. However, French purchases are rising fast, and the Chinese market could fall away over the next few years, due to tighter government controls on capital exports.
Florida, and especially the Miami-Dade area, is a highly sought-after destination for many French buyers, who have made up between 4 and 5 per cent of all foreign buyers over the past five years. Many cite security concerns as the main reason for relocating, while others are principally attracted by vibrant nightlife, tropical beaches, and impressive architecture on offer. Some already have vacation condos in South Florida, and are now upgrading to larger single-family homes.
As in previous years, the report shows that the most popular locations for international buyers were the tourist hotspots of Florida, Texas and California, which, along with Arizona and New Jersey, accounted for fully 50% of foreign sales. Many investors are pointing to geopolitical uncertainty to explain this increase, describing US bricks and mortar as safe-haven assets for affluent buyers from around the world, but especially those from Western Europe.
Brexit is causing deep concerns over the long-term stability of the EU, fuelled in part by fears over tax rises to make up for the loss of the UK’s large contributions. The effects of the ongoing migration crisis, meanwhile, have seen wealthy French relocating to London for years. Now even more citizens of France and Germany are leaving their home countries, some for Hungary and other Eastern European countries, but many for the USA.
However, Economists Outlook also revealed that UK buyers focus mainly on residential property for vacation use, with 61% of UK buyers non-resident, and two thirds of homes bought in the warm-weather states of California, Texas, Florida, Arizona, and Georgia.
Minimizing Costs – Maximizing efficiency?
With so much money flowing into the States, and the USD performing strongly against other major currencies. would-be buyers are looking for ways to cut down on the costs of transferring funds to the country.
Most US banks demand that foreign homebuyers have a balance of at least $100,000, while some set loan limits in the $1-2 million bracket. But that still leaves the issues of expensive transfer fees, hidden charges and volatile exchange rates, which together can cost investors tens of thousands of dollars.
Many are therefore turning to options such as Covercy’s industry-leading payment platform, which offers some of the world’s best cross-border currency solutions. It’s fast, user-friendly, completely secure and could save you thousands on your international transactions.