Editor’s Note: In August issue of the Housing News Report we took a look at international buyers in the U.S. real estate market. This is the first in a two-part series on international buyers. The first article will take a close look at the leading overseas purchaser of U.S. properties — Chinese buyers.
In the five thousand years of China’s history, never have so many Chinese quietly moved so much money out of the country at such a fast pace. Nowhere is that Sino capital flight more prevalent than into the U.S. residential real estate market, where billions are rapidly pouring into the American Dream. From New York to Los Angeles, China’s nouveau riche are going a housing hunting shopping spree.
This year, for the first time since the National Association of Realtors (NAR) has tracked foreign buyers of U.S. real estate, buyers from China have surpassed for the first time Canadians, Europeans, Mexicans and Middle Eastern home buyers as the top overseas purchasers of home in the United States.
China’s rise to the top has been nothing but remarkable. Chinese investment in U.S. residential real estate has grown from a measly $50 million in 2000 to an eye-popping $28.6 billion in the year ending in March 2015, up 72 percent from a year earlier, double the amount spent a year earlier, surpassing all other foreign buyers. Chinese buyers made up 16 percent of international buyers. Canadians made up 14 percent of overseas buyers. Mexican buyers ranked third, accounting for 9 percent of foreign buyers.
All told, overseas home buyers spent a record $104 billion buying U.S. homes in the 12 months ending in March 2015, with Chinese buyers leading the pack, reports NAR. In the 2014 survey, foreigners spent $92 billion on U.S. homes over a 12-month period, up 35 percent from a year earlier.
Chinese buyers are now the biggest international buyers of U.S. real estate in terms of dollar volume, total units and average price paid, the Realtor group reports. Moreover, 76 percent of Chinese buyers pay cash, according to the Realtor data.
Moreover, international buyers spent, on average, $499,600 on their home purchases compared to the overall U.S. average home price of $255,600. Chinese buyers spend the most, with an average price of $831,800 on their U.S. home purchases.