by Francis Monfort
Foreign investment in U.S. residential real estate reached a new high with foreign buyers and recent immigrants purchasing $153 billion worth of property between April 2016 and March, according to an annual survey by National Association of Realtors.
The figure represents a 49% increase from the $102.6 billion total in 2016 and exceeded the 2015 record of $103.9 billion. Overall, foreign buyers purchased 284,455 U.S. properties, a 32% increase from 2016. The purchase made up 10% of existing-home sales dollar volume, compared with 8% in 2016.
According to the survey, the growth was driven by a massive increase in sales dollar volume from Canadian buyers as purchases grew in the top five countries where buyers originated.
Transaction from Canadians during the period totaled $19 billion, a new high for the country, more than double the $8.9 billion in sales in 2016. China retained its top position in terms of sales for the fourth straight year with a $31.7 billion total –a new survey high exceeding the 2015 total of $28.6 billion, and the $27.3 billion figure in 2016.
The survey found that foreign purchases were made mostly in three states, with 22% in Florida, and 12% each in California and Texas. Canadian buyers bought the most property in Florida, Chinese buyers mostly chose California and Mexican buyers preferred Texas properties, according to the survey.
Looking ahead, NAR Chief Economist Lawrence Yun said he expects foreign buyer demand to remain robust due to the gradual expansion of U.S. and global economies. However, inventory shortages and economic and political challenges remain potential challenges to foreign sales activity.
“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” said Yun.