MLR

Chinese homebuyers lead foreign sales

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For the first time, Chinese buyers led all other foreign purchasers of U.S. homes, both in number and dollar volume, according to 2015 figures of the National Association of Realtors.

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Chinese buyers purchased 16 percent of all homes sold to foreign buyers, surpassing Canadians as the top homebuyers from outside the United States.

More than 209,000 homes were purchased by international buyers in the United States, totaling $104 billion in sales and accounting for 8 percent of all home sales between April 2014 and March 2015, according to the NAR’s 2015 Profile of Home Buying Activity of International Clients.

Following China in sales were buyers from Canada with 11.2 billion in sales, India ($7.9 billion), Mexico ($4.9 billion) and the United Kingdom ($3.8 billion).

International buyers buy more upscale homes. The average price of a home purchased by a foreign buyer was $499,600, considerably higher than the U.S. average of $256,000. And 55 percent of the foreign sales were made in cash, compared to 25 percent of domestic sales.

The average price of homes purchased by Chinese buyers was $831,800, due in part because the majority of homes purchased were in California. California is second to Florida in total number of international home sales, accounting for 16 percent of all sales, compared to 21 percent for the Sunshine State, the NAR report said. Canadian buyers favor Florida and Southwestern states. Texas had the third highest number of foreign home sales (8 percent), followed by Arizona (5 percent).

Nearly half of all international home sales are for primary residences, the study found. Approximately 20 percent are for residential rentals, 15 percent for vacation homes, 11 percent for vacation rentals and some for commercial rentals or homes for students studying in the United States.

While the total dollar amount of international sales increased by 13 percent in 2015 over the previous year, the total number of sales dropped by 10 percent, from 235,600 to 209,000 sales for the year ending in March 2015. The most sales were in 2010 at 300,600.

The drop in number of sales reflects both the stabilization and rising prices of the U.S. real estate market, as well as the strengthening of the U.S. dollar abroad, the report said.