Real estate hasn’t been immune from the global markets and activity that retailers have seen. Buyers from across the globe shop for homes online, view photos and descriptions, sometimes even giving ratings and in some cases make their purchases. Although a home may not be something you see waiting for you in a nondescript brown box, sitting on the porch, coming home from work, that hasn’t stopped many from investing in thousands of homes.
The international buyer, however, will unlikely purchases their next real estate property via click. Like their local purchasing counterparts, the international buyer will still visit the area they are interested in, conduct a walk through of the home, and perform necessary due diligence.
It’s not surprising. Impact of value of the US Dollar had a moderate effect on purchasers. There was also increased inventory of distressed assets in many regions leading to competitive pricing and purchasing. Weak demand from local buyers who either were unable to purchase, or waiting to purchase further increased inventory levels. Rental demand was also largely inflated due to the spike in demand and pricing. Investors everywhere was scrambling for income producing assets with high returns.
From international buyers, a significant percentage of home purchases are made by Canadians (23%) and Chinese (12%) with 63% of all international buyers purchasing with cash (National Assoc of REALTORS® 2013 Profile of International Home Buying Activity Infographic). The year ending in March 2013 led to $68.2 Billion in sales, which was down from the year before, but the second highest since 2007 when research data started to be collected.
Canada, China, India, Mexico and the United Kingdom remain as the major sources of purchasers. The bulk of international purchases are single-family homes for residential purposes. Location appears to be the primary factor affecting residential home purchases, depending on the buyer’s employment, vacation preferences, family, educational, and investment objectives.