Can Foreign Property Buyers Affect Domestic Activity On The Property Market?
By Selda Kirkan
There has been so much foreign activity on today’s property market over the last
while. We have seen a luxury condo in New York purchased for $88 billion by a
Russian billionaire. Miami has been engaged in deals from countless real estate
buyers from Brazil. And even one town in Wyoming has been purchased by one
investor all the way from Vietnam.
Anyone who has been able to observe property prices drop over the recent years will
certainly be able to state the obvious facts being that foreign property buyers have
become eager to find deals within the United States ever since values have declined as
a result of the major housing bust.
Needless to say, outstanding deals have been more than available to them as the grand
opportunity to purchase luxurious real estate options within prime locations across the
country has definitely given them an advantage in being able to acquire more symbols
of wealth within the United States.
But all of the activity coming in from different parts of the world has sparked interest
as to whether or not foreign property buyers are going to affect the activity coming in
from domestic buyers.
It is safe to say that, as early as now, it is unlikely that foreign property buyers could
affect domestic activity by significant amounts, especially since foreign activity only
accounts for a relatively small percentage of total sales being made across the United
According to a report recently made by the National Association of Realtors, foreign
property buyers have spent approximately $82.5 billion during a 12-month time frame
which ended in March of 2012. The total amount makes up for an increase of around
24 percent compared to the $66 billion amount that was spent in the previous year.
Nevertheless, the impressive numbers only account for a total of 9 percent of all real
estate sales on residential properties within the country.
Regardless of the fact that foreign activity has indeed gone up on a yearly basis, it
remains to be a small portion of the overall national level of activity that is seen on
the property market. If there is anything that can be said about foreign activity within
the nation, it would be that they have certainly helped to boost real estate values in
numerous areas which people should feel optimistic about.
If there is anything that could possibly serve as a hindrance to real estate activity for
domestic property buyers, it would most likely be the poor state of the economy and
job growth as well as the current lending situation.
Foreign property buyers tend to see real estate within the United States as a worthy
investment, especially since the country has secure property rights alongside stable
options which simply make today’s property market an even more attractive option
for their investments.