Chinese buyers have topped Canadians to rank as the biggest foreign purchasers of US homes by both sales and dollar volume, accounting for more than a quarter of all international spending.
Buyers from China spent US$28.6 billion on US homes and made up 16 percent of transactions by buyers outside the US in the 12 months through March, according to an annual report released on Wednesday by the National Association of Realtors. Canadians, which had led international purchases since 2008, ranked second with US$11.2 billion in spending and a 14 percent share of sales.
Homebuyers from China have flooded into the US market in recent years amid growing affluence by residents of the world’s most populous nation, where the US is viewed as a safe haven for wealth. They are typically buying more expensive properties, with an average purchase price of US$831,800, compared with US$499,600 for all international buyers.
“You look at the numbers and realize China is an expanding economy,” National Association of Realtors quantitative research managing director Jed Smith said. “While the Canadian economy is expanding, it’s going to be smaller relative to China. I think we’ll see more Chinese buying in the future.”
Indians ranked as the third-biggest group of foreign buyers, at US$7.9 billion, followed by Mexicans with US$4.9 billion and Britons at US$3.8 billion, according to the report. The survey groups buyers from Taiwan and Hong Kong with those from China.
By number of transactions, total US home sales to international buyers dropped 10 percent to about 209,000 units, indicating a stronger dollar decreased demand from abroad. Purchases by dollar volume were about US$104 billion, up from the year-ago estimate of US$92.2 billion, the group said.
“This means international purchasers in the US have become an upscale group of buyers, spending more money on fewer homes,” National Association of Realtors chief economist Lawrence Yun said in the statement.
Florida, California, Texas and Arizona attracted more than half of international buyers. Canadians tend go to the warmer climates of Florida and Arizona, while Chinese buyers gravitate toward the west coast, because of its proximity to Asia.
Buyers from China have also helped drive up prices in Cambridge, Massachusetts, where they seek proximity to Harvard University and Massachusetts Institute of Technology, Realty Direct Massachusetts-based agent Jason Zhang said.
“If you go to an open house here, maybe eight of 10 buyers are Chinese, one is Indian and the other is American,” said Zhang, an agent for 10 years and a Chinese speaker.
The majority of international deals — 55 percent — were all-cash transactions, compared with about 25 percent of home purchases made by US buyers, the Realtors group said.
Landsea Group (良詩集團), a builder based in Nanjing, China, opened a US division in 2013 to take advantage of the US housing rebound and growing demand for overseas real estate by mainland Chinese, according to John Ho (何英緬), chief executive officer of the company’s US division. Landsea, which has developed about 8.5 million square meters of housing in China, has projects underway in Simi Valley, California, and Weehawken, New Jersey.
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