Purchases Of US Real Estate By Foreigners Hit All-Time High In 2016

Tyler Durden's picture

In a testament to Chinese oligarchs, criminals, money launderers and pretty much anyone who is desperate to park their cash as far away from the mainland as possible, purchases of US real estate by foreign buyers surged to an all-time high in 2016, according to data from the National Association of Realtors via CNBC.

Foreign purchases of US residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume last year, with Chinese buyers leading the pack, followed by buyers from Canada, the United Kingdom, Mexico and India. Meanwhile, Russian buyers made up barely 1 percent of the purchases.

Foreign buyers closed on $153 billion worth of US residential properties between April 2016 and March 2017, a 49 percent jump from the period a year earlier, according to the NAR. That surpasses the previous high, set in 2015. Foreign sales accounted for 10 percent of all existing home sales by dollar volume and 5 percent by number of properties. In total, foreign buyers purchased 284,455 homes, up 32 percent from the previous year.

According to CNBC, the increase in home sales comes as a surprise, given the dollar’s relatively expensive valuation versus both developed and emerging-market currencies. Half of all foreign sales were in just three states: Florida, California and Texas.

Aging Canadians buying property in Florida and other warmer climates were responsible for the largest increase of buying activity from any one country.

“But the biggest overall surge in sales in the last year came from Canadian buyers, who scooped up $19 billion worth of properties, mostly in Florida. They are also spending more, with the average price of a Canadian-bought home nearly doubling to $561,000.

 

‘There are more [baby] boomers now than ever before. It's the demographic,’ said Elli Davis, a real estate agent in Toronto who said she is seeing more older buyers downsize their primary home and purchase a second or third home in Florida. ‘The real estate here is worth so much more money. They all have more money. They're selling the big city houses that are now $2 million-plus, where they went up so much in the last 10 to 15 years, so they're cashing in.’”

Mexican buyers nearly doubled their purchases by dollar volume from a year earlier, coming in third behind China and Canada. Though Adam DeSanctis, economic issues media manager at the National Association of Realtors, said "you could easily make the point that perhaps their uptick was wanting to buy now before new immigration policy was in place.”

In general, though, Mexicans have been buying less expensive homes.

The average purchase price of buyers from Mexico came in at about $327,000, compared with the $782,000 average among Chinese buyers and $522,000 for Indian buyers. Mexicans overwhelmingly favored homes in Texas, while Chinese buyers opted more for California and, increasingly, Texas.

 

‘The environment is much more Asian-friendly than it used to be with churches, grocery stores and schools that cater to their tastes,’ said Laura Barnett, a Dallas-Fort Worth area Re/Max agent. ‘I have been told they target good schools and newer homes. Yards are not a high priority, but rather community parks.’”

In a sign that home valuations in America’s most populous state might be nearing a peak, some Chinese are being priced out of California, forcing them to buy property in...Texas.

“It's also possible that Chinese buyers are being priced out of California. The average price of a home purchased by a buyer from China fell from about $937,000 to $782,000, even as the number of properties purchased jumped to nearly 41,000 from 29,000. The drop in purchasing power likely stems from tightened regulations in China with regards to capital outflow.”

As we’ve reported, Chinese authorities trying to stem the capital flooding out of their country adopted new currency controls specifically aimed at stopping Chinese nationals from illegally repurposing money to buy real estate. Those took effect early this year. Because of the new restrictions, CNBC says Chinese demand is beginning to wane – which could be catastrophic for home prices. Luxury markets in cities like New York City are already struggling with high vacancy rates. The recovery in home prices since the crisis has been uneven, but expensive coastal markets like New York and San Francisco experienced massive home-price inflation as younger Americans flocked to urban areas. However, if foreign demand weakens, these markets could be poised for a crash as fewer residents can afford to own their homes.

And of course, there’s the Trump factor…

"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 Lawrence Yun, chief economist for the NAR.

But if Chinese oligarchs are now out of the US real-estate game, who’s going to pay $150 million for this 14-acre parcel of beachfront property in the Hamptons?

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NidStyles's picture

Great work US Gov, now the Americans can't afford homes in their own country.

Mr. Universe's picture

Why don't they publish how many homes corporations bought this past year? Something tells me they won't stop until home/land ownership is only for the elite.

Xena fobe's picture

There is no to know because of shell corporations and straw buyers.  8n a communist country, how do you tell the difference between state and private anyway?

 

barysenter's picture

Set it on fire. If the FD shows up its State property. If they don't they figure developers are clearing the land of all species to smooth the process to make it productive State property. Baa.

coast1's picture

cool but I gotta a beter one for ya...chris rea...road to hell

Well I'm standing by the river
But the water doesn't flow
It boils with every poison you can think of
And I'm underneath the streetlight
But the light of joy I know
Scared beyond belief way down in the shadows
And the perverted fear of violence
Chokes the smile on every face
And common sense is ringing out the bell
This ain't no technological breakdown
Oh no, this is the road to hell

And all the roads jam up with credit
And there's nothing you can do
It's all just bits of paper flying away from you
Oh look out world, take a good look
What comes down hill
You must learn this lesson fast and learn it well
This ain't no upwardly mobile freeway
Oh no, this is the road
Said this is the road
This is the road to hell

Seasmoke's picture

Thomas Jefferson warned about this very thing. Home of the Brave. My ass. Bunch of pussys that never fight back.

coast1's picture

maybe i should not say this online, but I dont care...i have a pievce of property, and I have already armed myself, and made peace with my maker....I just pray, that if they take my homestead, my aim is true, and when they get me, its a bullet that ends my short life here immediately..I dont want to go to a hospital, or fema camp etc...get my drift?  i am just passing thru anyway...may my aim be true, and altho I know I will lose, may their aim also be true and end me without too much suffering.

roddy6667's picture

So you will die for some land?

Die for dirt?

You don't think very highly of yourself.

Xena fobe's picture

Land ruled by hostile foreigners, yep better to be dead

Muppet's picture

Fake news.  NAR = Proven liars.  Repeatedly proven liars.   Yet, voice amplified time-and-time again by ZH.

seisen's picture

Don't let them fool ya. It is not about "them Foreigners", it is about High-net-worth individuals (HNWI).

moorewasthebestbond's picture

These foreign carpetbaggers need to be thrown out on their asses and their funny-money purchases invalidated.

 

This can happen right after the Americans who allowed and facilitated these purchases are hung by the neck until dead.

Bai Suzhen's picture

This can happen right after the Americans who allowed and facilitated these purchases are hung by the neck until dead.

Someone gets it.  However once foreigners see that the cause of the problem has been isolated and corrected, they'll leave on their own.  Still, it won't be easy to get all of the "American" problem down, since many of those responsible are likely "dual citizens," and will have left on flights to Tel Aviv, business class, once they've seen the writing on the wall.  And once that happens, you'll never be able to extradite them or their shekels.

DaBears's picture

When Chinese banks forced to auction off those repo homes, I will pay you pennies on the dollar, enjoy your Mao-noploy Yuan back at home!

roddy6667's picture

Foreigners always come to the party late. That's how you know when to leave. In the late Eighties, it was the Japanese. This author has declared the foreigners to be "Chinese oligarchs, criminals, money launderers".  Just being foreigners is not good enough for Doom & Gloom porn.

Bai Suzhen's picture

It should be illegal for any foreigner to own property in the US.  But only citizens of an organic nation, tied to the land and each other through family, clan, ethinc and racial bonds, would think like that.  The US is, for all intents and purposes, a Global Special Economic Zone, where the ruling principle is money, and anyone anywhere who can bring some to the table is welcome.  But before blaming foreigners for this mess, we must ask ourselves where they got the money to buy the property, in the first place?  But it's easier to confuse the effect with the cause.

TeethVillage88s's picture

It should be illegal for any foreigner to own property in the US.

- Sub-Prime Auto Debt, Auto Debts of USA
- Sub-Prime & all Housing Mortgages, MBS, CDO,
- Student Debt of USA
- Local, County, City, State Govt Debt or bonds
- University or College or Tech School Debt Instruments
- Any Utilities, public or private
- Any Telecom, phone, MSM, Company Debt
- Any DHS Type Security Company, anything which could be Intel
- Any kind of Port, Waterway, Toll Road, Bridge, Company or Debt
- Any kind of State Dominant or Regional Meat, Produce, Beverage, type company or Debt

Xena fobe's picture

You are mistaking the policy of the oligarchs wiith the wishes of the people.  The oligarchs and globalists are traitors who profit from destroying this nation.

It is up to real Americans to decide if this is acceptible.  If you read the comments, you can tell who is on which side.

Immigration was intended for people who wish to assimilate and respect American culture.  Not people who wish to colonize for foreign powers.

Only the heavy hand of opression and corrruption preserve your existence.

 

 

 

 

 

John Law Lives's picture

‘The environment is much more Asian-friendly than it used to be with churches, grocery stores and schools that cater to their tastes,’ said Laura Barnett, a Dallas-Fort Worth area Re/Max agent.

Maybe that helps explain this:

https://www.dallasnews.com/business/real-estate/2017/04/07/million-dolla...

excerpt:

"It's no secret that North Texas homes are getting pricey. But never before have so many high-priced houses been up for grabs here."

Fed_Induced_FUBAR

Xena fobe's picture

Unfortunately, "Asian friendly" (Chinese friendly) means American unfriendly. 

Some groups are close enough to be able to coexist.  Some are not. 

 

ZangotheMagnificent1's picture

Another good news is really bad news Zerohedge article

venturen's picture

who doesn't love a real estate bubble with fiat printed money. Talk to 1990 Japanese investors who are still in the negative

venturen's picture

Japanese tried this trick in 1990....will be the same ending....multi decade implosion