Buying a Home: International Investors to Bring More Competition
Foreign buyers are soon to become and even bigger force in the U.S. real estate market threatening more competition for those buying a home here.
Real estate agents are already calling many areas of the country a ‘seller’s market’ and are reporting an increase in multiple offers and bidding wars, a situation which could become even more challenging for new real estate investors and those interested in buying a home for the first time.
International investors already make up a sizable percentage of those buying a home in a number of U.S. markets and that could soon grow rapidly for two reasons.
The first is that many countries are now facing their own real estate bubbles after 5 years of record performance including China which has seen a 100% rise in property value in its major cities. Others which could be bubbling quickly include Canada, Honk Kong, Malaysia, Norway and Singapore to name a few.
This means a flood of flight capital with homeowners abroad eager to cash out and stash their cash somewhere safer before things go downhill and equity evaporates. Surely there is nowhere that offers more value for buying a home at the moment than the United States.
The rapidly rising property values in some countries abroad is also causing governments to take drastic measures to curb investment in order to keep housing affordable for their citizens. This includes levying hefty taxes for those flipping houses and dramatically raising the minimum amount of capital required for foreign buyers to buy in their countries. This in turn should direct more investment dollars our way.
This will certainly boost our market and the demand for new homes and turnkey rental properties, though there could be a large disparity in where those funds are focused and it could force locals interested in buying a home to pay top dollar.