Chinese buyers have surpassed Canadian snowbirds as the dominant foreign buyers of homes in the U.S., according to the National Association of Realtors.
Purchasers from China made up 16% of international buyers who bought primarily single-family homes and condominiums in the 12-month period that ended in March, according to the survey by the National Association of Realtors. That was up from 12% in 2013. Canadians made up 14% of international buyers, down sharply from 23% in the 2013 survey. In third place were Mexicans who made up 9% of foreign buyers in the recent period, up slightly from 2013.
For many years, Canadians seeking warmer weather—mainly in the American Sunbelt—were the biggest foreign buyers of U.S. homes, which were often purchased as vacation or retirement properties. But Canadian sales have declined recently, in part due to the weak Canadian currency, which raises the cost of dollar-denominated products. Meanwhile, Chinese purchases have picked up.
The Chinese also dominated dollar volume of properties sold. Buyers from China purchased $28.6 billion of properties in the U.S. in the year ending in March 2015. That compares to $11.2 billion of properties that were purchased by Canadians and $7.9 billion by buyers from India. Mexicans were fourth by dollar volume with $4.9 billion of purchases.
The numbers reflect a growing interest by Chinese buyers in plunking their dollars in the relative safe haven of American real estate, where rules around owning property are well defined and the economy is viewed as strong and stable, said Jed Smith, managing director of quantitative research at the National Association of Realtors.
Overall, the number of transactions dropped 10% from last year, even though total dollar volume of sales was up 13% to $104 billion, according to the survey. Mr. Smith said the decline in transactions was due largely to currency changes. Indeed, 75% of Realtors surveyed said that exchange rates are important to foreign buyers, which could pose challenges if the U.S. dollar continues to strengthen.
International buyers make up just 4% of existing home sales, but they are important to the market because they tend to spend much more than their local counterparts. Thirty-five percent of Realtors reported working with an international client in 2014. They spent on average $499,600 on a property, compared with the average U.S. home price of $255.600.
Chinese buyers spent the most on U.S. homes: $831,800 on average. The average price of home purchased by Canadians was $380,300.
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