Daily Real Estate News | Friday, July 11, 2014
The number of Chinese home buyers and investors flocking to the U.S. is on the rise, driven by China’s currency appreciation, rising affluence, and concerns over its own economic slowdown, according to the 2014 Profile of International Home Buying Activity, released this week by the National Association of REALTORS®.
“It’s just the beginning of a tidal wave,” says Lawrence Yun, NAR’s chief economist. Chinese investors accounted for 16 percent of the $92.2 billion worth of international U.S. homes purchases in the year through March, up from 12 percent a year earlier, according to NAR.
China was the leader in dollar volume of international purchases, purchasing an estimated $22 billion with an average sales cost of $590,826, according to the NAR report. China also was the fastest-growing source of U.S. foreign transactions, now accounting for 16 percent of all purchases, up 4 percent from last year.
Canada maintained the largest share of purchases, but it’s share is falling – 23 percent in 2013 to 19 percent in 2014.
The share of Chinese buyers in the U.S. market will likely only get bigger, says Paul Diggle, Property economist at Capital Economics.
“This bigger picture hides a rapid rise in purchases by Chinese investors, who may overtake Canadians as the largest group of foreign buyers of U.S. housing within the next five years,” Diggle told HousingWire. “The strength of Chinese demand is another reason to watch closely developments in the Californian housing market, where housing is now no better than fairly valued at the statewide level and starting to look frothy in a number of metros.”
Reprinted from REALTOR® Magazine Online, July 2014, with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright July 2014. All rights reserved.