Over the last year only, foreigners purchased a record number of residential locations across the United States. This widely spread phenomenon seems strange in the current political context. There are chances of an immigration crackdown that could depart the new owners from their investments.
Canadians Were the Foreign Investors with the Largest Increase in Investments in U.S. Real Estate
On Tuesday, the National Assn. of Realtors made public some surprising facts about the situation of the U.S. real estate industry. There were 284,455 properties in the last 12 months up until March 31 that entered the possession of foreign investors. By comparison, last year the numbers showed a third less activity. At the same time, the dollar volume skyrocketed 50% to $153 billion. This marked a second record since this survey began back in 2009.
The largest national pool of buyers came from China that ordered $31.7 billion worth of real estate. The previous year, their activity brought in only $27.3 billion. On the other hand, Canadians are the group responsible for the largest increase in such U.S. investments. This country experienced a surge in prices over recent years which the Chinese investment induced.
As a consequence, this year Canadians bought $19 billion worth of properties. This is twice as much as last year. Record price surges affected mostly two big cities in Canada, namely Toronto and Vancouver.
Foreigners Still Believe in a Safe America Despite the Possibility of an Immigration Crackdown
Therefore, the government imposed property taxes intended only for foreign investors. Consequently, buyers started cashing out and redirect their funds towards smaller properties in Canada plus additional vacation houses in the United States. Real estate agent in Toronto, Elli Davis, believes that this is the explanation to why Canadians are turning to America, despite risks of an immigration crackdown.
Realtors’ chief economist, Lawrence Yun, claimed that foreigners still believe in the safe and secure side of America, despite current President’s rhetoric against immigrants. On top of that, investors all over the world wanted to join the American market now when the dollar is incrementally increasing in value. They believe that at some point in the near future, their currencies won’t be able to face anymore the American buck.
Image source: 1