10 countries racing to buy American homes...
International homebuyers are attracted to the United States
for a number of reasons. These include favorable housing prices, good weather,
the country's relative economic stability and an attraction to America in
general. As the housing market improved and home prices rebounded, the interest
of foreign buyers in U.S. properties has soared.
Overseas buyers likely see value in the U.S. housing market.
In an interview with 24/7 Wall St., Daren Blomquist, vice president of
RealtyTrac, said, "The U.S. real estate market is coming off of a rough
patch and entering recovery mode. And so international buyers see it as a great
time to jump in and catch the U.S. market on the upswing." According to
the Case-Shiller 20-City Composite Home Price Index, the U.S. housing market is
just beginning to rebound from its lows set in March 2012.
While tepid growth may dissuade some potential homebuyers,
these countries have many exceptionally wealthy residents. Three of these
countries — Germany, the United Kingdom and China — each had more than 10,000
ultra high net worth residents last year and were in the top five countries
globally in that measure. China's total number of ultra high net worth
residents is even greater if the 3,180 ultra wealthy residents of Hong Kong are
included.
Another key factor that drives many prospective homebuyers
to consider the United States is common language. English-speaking countries
accounted for 68% of international residents looking for homes in the U.S. Much
of this interest came from U.S. neighbor Canada, which alone accounted for 45%
of all international interest. The United Kingdom and Australia also each
accounted for more than 10% of all interest, ranking second and third among all
countries, respectively.
However, language does not explain the increased interest
from countries such as the UAE and China, Blomquist noted. Additionally, much
of the growth in foreign interest has come from European nations, including
Switzerland and France. Six of the countries with the largest percentage increases
in property seekers are located in Europe.
Another likely important factor in driving international
interest in U.S. homeownership may be America's reputation as a relative safe
haven for investors. For many buyers, Blomquist noted, the U.S. represents
"the most stable country out there."
Concerns about the financial systems in Italy and China may
contribute to demand for U.S. homes from those countries as well. Worries in
China, Sweden, Canada, Switzerland and the U.K. about the local housing market may
also be driving U.S. investment.
To determine the 10 countries where the interest in buying
American homes is on the rise, 24/7 Wall St. reviewed subscriber data from
RealtyTrac. We also reviewed figures on real (inflation-adjusted) GDP growth,
population and other macroeconomic factors from the International Monetary
Fund's (IMF) World Economic Outlook. Figures on the number of ultra high net
worth individuals, defined as people worth $25 million or more, are from
Wealth-X.
These are the countries racing to buy American homes.
10. Germany
> Growth in prospective homebuyers: 95.2%
> Share of int'l prospective buyers: 2.6% (7th highest)
> GDP per capita: $39,468 (18th highest)
> Ultra high net worth population: 17,820 (2nd highest)
Germans accounted for 2.6% of all of RealtyTrac's
international homebuyers looking for U.S. property between 2009 and 2013.
During that time, home searches rose by more than 95%. Contributing to Germans'
ability to afford international property was the country's high number of ultra
high net worth individuals last year of 17,820, second only to the United
States. Despite the weakness of the eurozone economy and Germany's own slowing
growth, no major eurozone country grew faster in 2013. However, interest in
U.S. properties has tapered off recently, despite the euro's gains against the
dollar. Between 2012 and 2013, the number of German prospective homebuyers to
RealtyTrac rose by just 3.4%, less than most foreign nations during that time.
9. Sweden
> Growth in prospective homebuyers: 100.0%
> Share of int'l prospective buyers: 2.0% (9th highest)
> GDP per capita: $40,870 (14th highest)
> Ultra high net worth population: 1,070 (25th highest)
The number of Swedes interested in buying U.S. real estate
doubled between 2009 and 2013. Much of this growth happened last year, when the
number of Swedish home searches to RealtyTrac rose by 43%. Like many countries
with many residents looking for homes in America, U.S. property may be
considered an especially good investment, especially as their country's economy
has been stagnant. Sweden's gross domestic product has grown less than 1% in
each of the past two years. Additionally, many Swedes might find U.S. home
prices more affordable. U.S. home prices remain below last decade's highs,
while many market followers believe Swedish home prices are precariously high.
8. Canada
> Growth in prospective homebuyers: 107.7%
> Share of int'l prospective buyers: 45.0% (the highest)
> GDP per capita: $43,146 (9th highest)
> Ultra high net worth population: 4,980 (8th highest)
Canadians make up the largest share of international U.S.
home-buying interest, accounting for 45% of total international RealtyTrac
subscriptions between 2009 and 2013. The U.S. geographical proximity to Canada
and the cultural similarities between the two nations may explain the interest
of Canadian investors. The strength of the Canadian economy may have also given
residents more opportunities to invest. Last year, the average Canadian
household's net worth, the total value of all assets minus all debt, exceeded
that of the average U.S. household. Residents may also find U.S. properties
attractive because some consider Canada's housing market to be overvalued by
some.
7. Australia
> Growth in prospective homebuyers: 121.9%
> Share of int'l prospective buyers: 11.0% (3rd highest)
> GDP per capita: $43,042 (10th highest)
> Ultra high net worth population: 3,405 (11th highest)
Australians accounted for 11% of all of RealtyTrac's
international subscribers, third most after the United Kingdom and Canada. The
country's strong economic growth — at least when compared to other major
developed economies — likely contributed to the increased interest in buying
U.S. property. Australia's economy grew by 3.7% in 2012 and an estimated 2.5%
last year, according to the most recent IMF figures. By contrast, countries in
the developed world grew by just 1.4% in 2012 and 1.3% in 2013. Despite recent
declines, the Australian dollar has also gained considerably against the U.S.
dollar in the past few years, also potentially contributing to the increased
interest.
6. United Kingdom
> Growth in prospective homebuyers: 153.8%
> Share of int'l prospective buyers: 12.1% (2nd highest)
> GDP per capita: $37,299 (21st highest)
> Ultra high net worth population: 10,910 (4th highest)
U.K. interest in owning American property has jumped in
recent years, including a 34.6% increase in the number of residents looking for
property on RealtyTrac alone. Economic reasons could influence prospective
homebuyers — residents may see U.S. homes as a safe or profitable investment.
The U.K. government's Help to Buy program, which provides financial help to
prospective homeowners in the U.K., has drawn controversy. Detractors of the
program have expressed concerns that home prices in the U.K. could rise to
unsustainable levels. According to a June 2013 study by the National
Association of Realtors, U.K. residents primarily buy single-family homes in
suburbs and resort towns in the United States.
5. Italy
> Growth in prospective homebuyers: 178.4%
> Share of int'l prospective buyers: 1.9% (10th highest)
> GDP per capita: $29,598 (34th highest)
> Ultra high net worth population: 2,075 (14th highest)
Italian interest in U.S. homes rose considerably in recent
years. Residents looking for homes in the U.S. rose by 178% between 2009 and
2013, despite Italian GDP falling by 2.4% in 2012 and 1.8% last year. In fact,
the faltering economy may encourage many Italians to consider U.S. property as
a relatively good investment. Italy is also home to a number of extremely
wealthy citizens with the resources to invest globally. As of last year, there
were more than 2,000 ultra high net worth individuals in Italy — 14th most
globally — despite the fact Italy's population totals an estimated 61 million,
24th most in the world.
4. France
> Growth in prospective homebuyers: 190.0%
> Share of int'l prospective buyers: 2.8% (6th highest)
> GDP per capita: $35,680 (24th highest)
> Ultra high net worth population: 4,490 (9th highest)
Interest in the United States from French residents has
soared recently. Searches for homes on RealtyTrac from France nearly tripled
from 2009 to 2013, and rose by nearly 60% last year alone. One reason for this
may be that France had nearly 4,500 ultra high net worth residents as of last
year, more than in all but eight other countries globally. However, France's
economy has also flatlined in recent years, which can often prevent foreigners
from buying U.S. property. Simultaneously, many observers and residents have
criticized President Francois Hollande's socialist policy decisions and the
resulting high taxes. A number of reports indicate that residents may be
leaving the country due to high taxes and tough regulations.
3. Hong Kong and China
> Growth in prospective homebuyers: 254.2%
> Share of int'l prospective buyers: 4.1% (4th highest)
> GDP per capita: $52,687 (7th highest)
> Ultra high net worth population: 13,855 (4th highest)
China's residents are a major source of international
interest in U.S. real estate. China and Hong Kong, collectively, accounted for
4.1% of all international searches on RealtyTrac, more than any other
non-English speaking country. One factor that may contribute to this demand is
the high number of ultra wealthy residents in mainland China and Hong Kong,
where a total of 13,855 such individuals live — more than in all developed
nations but the United States, Germany and Japan. In recent years, many wealthy
Chinese citizens have considered, or expressed interest in, moving to the
United States. Additionally, while China's economy remains one of the fastest
growing in the world, concerns about slowing economic growth and rampant shadow
banking activity in the country are considerable. A relatively wealthy
population, and concerns about wealth protection, may encourage Chinese
residents to consider U.S. property.
2. Switzerland
> Growth in prospective homebuyers: 269.7%
> Share of int'l prospective buyers: 2.1% (8th highest)
> GDP per capita: $45,999 (8th highest)
> Ultra high net worth population: 6,330 (7th highest)
The number of Swiss residents interested in U.S. property
has risen dramatically in recent years. Only the United Arab Emirates had a
larger increase in the number of prospective homebuyers than the small Alpine
nation. Swiss residents accounted for 2% of all international searches despite
a population of just roughly 8 million — smaller than New York City. Despite
its size, Switzerland was also home to more than 6,300 ultra wealthy residents
last year — more than all but a handful of countries. Also helping to make U.S.
properties more appealing, or at least more affordable, is the considerable
appreciation of the Swiss franc against the dollar over the past five years, up
nearly 27% in that time.
1. United Arab Emirates
> Growth in prospective homebuyers: 352.2%
> Share of int'l prospective buyers: 1.1% (12th highest)
> GDP per capita: $29,877 (31st highest)
> Ultra high net worth population: 1,050 (26th highest)
While UAE residents accounted for just 1.1% of RealtyTrac's
international searches, interest in U.S. property from the country has boomed.
Between 2009 and 2013, the number of UAE subscribers rose by 352%, the largest
percentage increase of any country. One reason may be the relatively high
number of residents who can afford international property ownership. While the
country has just 9 million residents, it had more than 1,000 ultra high net
worth residents last year. Much of this wealth is likely connected to the
country's oil industry. Roughly 40% of the emirates' GDP was tied to oil and
natural gas output, according to OPEC, and oil prices have risen considerably
in recent years.
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