Is it the Right Time for Thais to invest in American Real Estate?

Less real estate transactions in expensive cities like New-York and San Francisco, and more transactions in smaller cities. Where do the investors come from?

RE/MAX Thailand Master Franchise Chief Executive Officer, Eran Milo

In the United states, the real-estate market continues to grow and flourish but the international buyers are changing their focus from prestigious and well-known big-city properties to low tag price properties. The main reason for this shift is the rising costs of the housing market, along with a strong dollar currency that charge a high currency conversion fee for international buyers.

"The slowdown in financial growth all around the world, the decline of foreign currencies and the financial market upheaval, have presented highly complex challenges for the foreign buyers in this past year", says Laurence Yun, head economist of the National Association of Realtors (NAR). "These obstacles have caused a slowdown in sales with buyers that live abroad, but foreign immigrates' purchases have gone up recently, which has brought the total sales made by foreigners to the second highest it has been since 2009".

Non-American buyers have purchased residential properties for a combined total of 102.6 billion dollars within the US between April 2015 and March 2016, according to the NAR annual report of international activities in the American real estate market. The total sum of purchases has in fact dropped by 1.3% compared to the last year, but the number of assets has gone up by 2.8%, to 214,855 properties. The average value of the properties purchased by foreigners was higher than the average price of all properties in the US.

The Chinese are leading in the Globalacquisitions

In terms the buyers' nationality, the Chinese have continued to be the leading force. China has a

higher number of sale than all four countries that follow the list, combined, and has 3 time more sales that the country that follows it, Canada.

The Chinese bought assets of higher prices than the average. "Although the Chinese currency is weak compared to the American dollar, it is still stronger than it was 5 or 10 years ago, so the properties in the US are considered reasonably priced in the long run", Yun writes in the report. According to the report writers' analyzation, real estate in the US is considered a safe and cheap investment compared to the real estate market in Asia, due to the upheaval in the financial market around the world.

"The outstanding growth of China's economy has created a large social class of wealthy Chinese. And with the slowdown in the country's economy, those people have begun looking for better investment alternatives, and many have come to the conclusion that American real estate is a safe bet".

The main cause that drives the Chinese to purchase properties the US is the idea of long-term investment, and the second reason is that the Chinese invest in the US for immigration purposes, the Chinese also think ahead in regards to family and children and will be prepared to buy an apartment for the use of their children's future education, even if they have not reached puberty yet.

In terms of investment locations, 5 states make up half of the purchases made by foreigners: Florida (22%), California (15%), Texas (10%), Arizona and New York (Each 4%). The buyers from Latin America, Europe and Canada prefer Florida and Arizona. The buyers from China surged to California and New York. Texas saw a mix of buyers from Latin America, the Caribbean and Asia.

Although the US is the country that has the highest demand of the Chines buyer, RE/MAX International sales data shows that the Chinese purchase properties also in, Australia, United Kingdom, New Zealand, Canada, France, Japan, Thailand, Spain and Singapore.

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