Tighter inventory levels have led to lower volumes of US property investment by foreigners, but Florida continues to rank as the favourite state. 19% of purchases by international buyers took place in the Sunshine State, well ahead of its nearest competitors.
The latest report on US property investment by foreigners reveals that the period between April 2017 and March this year had less activity. The 2018 Profile of International Transactions in US Residential Real Estate published in early August by the National Association of Realtors (NAR) finds that purchases fell by 21% on the previous period. NAR analysts attribute the change to lower supply on the US market, an issue affecting homebuyers across the board.
Florida most popular for US property investment
The 2018 survey also reveals that the Sunshine State remains the outright favourite among international buyers. Florida accounted for 19% of all purchases by foreigners, almost one-fifth of the total. The state’s nearest competitor was California with 14% of the share. Other popular states were Texas (9%) and New York and Arizona, both with 5%.
Florida ranks as the most popular location for US property investment year after year. Reasons to invest in Florida include good return potential on both buy-to-let properties and holiday lettings.
Opportunities for capital appreciation on Florida property are also good – the Forbes Best Buy Cities: Where to Invest in 2018 highlights properties in Orlando and Jacksonville. “Orlando outperforms,” says the report. “House prices are still 22% below the national average, but are set to rise 35% by the end of 2020.” Forbes also forecasts that prices in Jacksonville will go up 20% by 2020.
Foreigners spend more
On average, foreigners tend to spend more on US property investment than their American counterparts. The NAR report found that the median purchase price for international buyers in 2018 was US$292,400, considerably ahead of the national median of US$249,300.
Among foreigners, the Chinese were the biggest spenders with a median of US$439,100. Chinese investors also represented the largest international group and accounted for US$30.4 billion of the total US$121 billion spent by international buyers on US property.
The next largest group were Canadians with a total spending of US$10.5 billion, followed by buyers from the UK who spent US$7.3 billion on US property investment in the 12 months to April this year. Both Canadian and UK buyers tend to focus on Florida where holiday homes are a popular purchase, particularly in Orlando and on the coast.
(Source: National Association of Realtors)