In real estate news, the U.S. housing recovery continues, helped along by international buyers investing billions in American residential property. While traditional players such as Canada and Mexico still factor strongly, they are being upstaged by a new surge of wealthy Chinese buyers.
The US market is seen as a favorable investment for wealthy Chinese, many of whom will never live in the properties they purchase. With 75% of purchases paid for in cash, these investments are often used to diversify and as a hedge. While about 40% of buyers intend to live in their homes full time, almost half of the properties are bought for investment purposes only.
For some time now, Chinese house hunters have preferred California and Washington, with New York and Pennsylvania not far behind but new data reveals another state gaining approval. With nearly $10 billion of annual trade with China; Texas is becoming increasingly popular with Chinese investors and the city of Plano, near Dallas, already boasts a sizable Chinese population.
Many Chinese buyers purchase condos and homes for their children’s use while studying at U.S. colleges. Investors like these hope to benefit from increased property values when the children graduate. Another group of Chinese investors are becoming landlords, buying low priced properties, refurbishing them then renting them out. And there are the investors who will use their properties as vacation homes for a few weeks each year and rent out afterwards.
It’s a well-known fact that Texas has always been popular with out-of-state investors. The reality that the Lone Star State is getting attention from international investors should come as no surprise.
In the period March 2012 to March 2013, international buyers accounted for $ 6.13 billion of the total Texas property sales volume, a trend that seems set to continue. Originally, the international interest in American properties began because of the housing recession. Overseas investors were cashing in on the glut of cut-priced properties they would then flip for profit.
With the economy, and consequently the housing market, well on the way to recovery, Texas property is catching the attention of overseas investors looking for a new home base. Wealthy Chinese looking to diversify their portfolios or buy into the Texas lifestyle are starting to take notice of the Lone Star State. Primary residences, vacation homes and investment properties are the key targets of these new Chinese investors.