Foreign demand for US real estate is waning: experts

High prices and strong dollar making NYC and Miami properties less attractive

New York /
Mar.March 09, 2016 01:05 PM

Real estate buyers from countries such as China, Russia, Canada and Brazil have poured hundreds of millions of dollars into New York real estate over the last few years, but evidence is mounting that that flow is slowing down.Foreign demand for U.S. properties is set to diminish, under pressure from high prices and a strong dollar, according to the National Association of Realtors, the Wall Street Journal reported.

Prices for high-end properties have risen steadily since around 2012 when the real estate market hit bottom, recently rising to record highs, partly fueled by the influx of foreign investment.

The strong dollar has made properties in cities such as New York, Miami and Los Angeles, where foreign buying has been concentrated, significantly more expensive. Median prices for existing homes in the U.S. have risen by 67 percent for Brazilian buyers over the past year, for example, the Journal reported, citing NAR. Prices have climbed 27 percent for Canadian buyers — and 14 percent for Chinese buyers.

Chinese demand is likely to diminish less severely than other countries’, NAR’s chief economist Lawrence Yun told the Journal, because while Chinese economic growth has slowed over the last year or two, the country’s GDP is nonetheless expanding at about 6 percent a year.

NAR determines the level of foreign demand by surveying real estate brokers across the country. The results of this year’s survey will be released in early summer. [WSJ]Ariel Stulberg


Related Articles

arrow_forward_ios
The report shows the small uptick among single-family homes, townhomes, condominiums and co-ops. (iStock)
After rebound, existing home sales growth slows in October
After rebound, existing home sales growth slows in October
Homes are selling at a the fastest rate we've seen since 1989 (Getty)
Buyers, don’t blink: More U.S. homes selling in one week
Buyers, don’t blink: More U.S. homes selling in one week
(iStock/Illustration by Kevin Rebong for The Real Deal)
“Brace yourselves”: Residential agents prepare for return of foreign buyers
“Brace yourselves”: Residential agents prepare for return of foreign buyers
Nationwide contract signings cool in September as buyers await fresh options
Nationwide contract signings cool in September as buyers await fresh options
Nationwide contract signings cool in September as buyers await fresh options
Existing home sales were on the upswing in September following a slight dip in August. (iStock)
Existing home sales rebound in September, rising by 7%
Existing home sales rebound in September, rising by 7%
Contracts rose everywhere, especially in the South and Midwest (Unsplash / Birgit Loit)
August home contract signings rise after 2 months of decline
August home contract signings rise after 2 months of decline
Home sales dipped in August after two months of increases
Home sales dipped in August after two months of increases
Home sales dipped in August after two months of increases
The number of homes under contract fell 1.8 percent in July, the second straight month of declines as eager buyers await more supply. (iStock)
Fewer homes, fewer contracts: pending home sales dip again in July
Fewer homes, fewer contracts: pending home sales dip again in July
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...