Foreign Investors See Big Opportunity in U.S.

January 11, 2016

Foreign investors are expected to pour more money into U.S. real estate this year than they did last year, according to a newly released survey by the Association of Foreign Investors in Real Estate of about half of the group’s 200 members.

The survey showed that 64 percent of respondents said they intended to make modest to major increases in U.S property investments this year. Thirty-one percent said they plan to maintain their holdings or reinvest sales proceeds into other U.S. assets.

New York remains the top target market globally, according to the survey.

“This is a very strong response,” says Jim Fetgatter, chief executive of AFIRE. He noted to Bloomberg that China’s economic slowdown, Brazil’s recession, and Europe’s immigration crisis have instilled in international investors that “the U.S., at the moment, really is the safest place for them to go.”

The U.S. ranked as the country with the best opportunities for price appreciation in 2016, followed by Brazil, Spain, Ireland, and the United Kingdom, according to the survey.

Investors from Canada, Asia, Europe, and Australia in search of higher yields have been making investments in office towers, warehouses, apartment buildings, shopping malls, and hotels.

In the residential sector, foreign buyers have remained strong too. About 209,000 homes were estimated to have been sold to foreign buyers in the 12 months ending March 2015, according to a report released last year by the National Association of REALTORS®, “The 2015 Profile of Home Buying Activity of International Clients.”

What’s more, foreign buyers, on average, paid nearly $500,000 for a home – compared to about $256,000 overall for the U.S. average house price. NAR’s report showed that the four states accounting for 50 percent of international sales last year were Florida, California, Texas, and Arizona.

Source: “U.S. Real Estate to Draw More Foreigners in 2016, Survey Says,” Bloomberg (Jan. 3, 2016)