Chicago, IL, United States (4E) – Chinese nationals bought $22 billion worth of homes in the U.S. from April 2013 to March 2014 making them the biggest foreign buyer of local properties during the period, according to the National Association of Realtors (NAR).
NAR, the largest U.S. trade association with one million members from the real estate industry, said in its “2014 Profile of International Home Buying Activity” report that the Chinese purchase accounts for 24 percent of total international sales of U.S. homes during the period. Canada had the second-largest share of international sales with 15 percent or $13.8 billion followed by the United Kingdom, India and Mexico.
Chinese buyers paid the higher average price of $590,826 for the properties mostly located in California, Washington, and New York. Canadians bought in lower-priced markets such as Florida and Arizona.
NAR attributed the dominance of Chinese homebuyers to the rising affluence of China and the appreciation of the Chinese yuan that made U.S. properties more affordable to them. Another reason is China’s brewing housing bubble and a slowing economy that have led to a growing number of Chinese buying real estate abroad, according to China News Service’s real estate web portal. Chinese buyers are also attracted by the high rental rate in the U.S. that will allow them to recover their investment in six to seven years, according to Lu Heren, president of Meritros Investment Group.
Chinese buyers in China also skirted Beijing’s limit on the amount of Chinese currency convertible to U.S. dollars. Banks in Guangdong made the conversion while Bank of China is suspected of enabling mainland investors to shift their funds offshore for the purchase of property. Estimates by domestic media peg the volume of money transferred abroad via the trial program at as high as $3.4 billion.
More international buyers paid in cash than domestic buyers due to tight U.S. credit standards, NAR also found. Most homes purchased by foreign buyers, about 42 percent, are used as a primary residence. Non-resident foreigners are limited to 6-month stays in the U.S., so these buyers largely use the property for vacation or rental purposes or as an investment.
Approximately 65 percent of purchases by foreigners involved a single-family home. Nearly half of international clients preferred properties in a suburban area, about a quarter preferred a central city or urban area, and about 13 percent choose to purchase in a resort area.
Foreign buyers of U.S. homes likely looked at the property online using virtual tour or personally visited the actual site. Real estate agents in the U.S. create virtual tour on websites such as Nestbuilder.com. The site created by RealBiz Media Group, Inc. (OTC:RBIZ) of Florida provides real time customized videos, an intuitive analytics dashboard, and professional video creation, editing, rendering and syndication functionalities.
Nestbuilder.com also provides the Microvideo App, which agents can use to create dedicated pages or microsites for their listings, as well as videos, events and news entries that they can cross-post on their social media accounts. The MVA platform is also equipped with an analytics dashboard that agents can use to monitor and customize their campaigns.
More than 250,000 real estate agents and brokers are users of Nestbuilder.com.