Most of the buyers from India are resident foreigners buying primary residences
An annual survey of residential purchases from international buyers released on Tuesday revealed that Indians are among the top five investors in residential properties in the United States with a sales dollar volume of $7.8 billion.
The 2017 Profile of International Activity in US Residential Real Estate provided the data from April 2016 to March 2017 and said that foreign buyers purchased $153.0 billion of residential property during the 12 month period.
Chinese nationals were the biggest among foreign buyers purchasing property worth $31.1 billion, followed by Canada ($19.0 billion), the United Kingdom ($9.5 billion), Mexico ($9.3 billion), and India ($7.8 billion). The bulk of buyers from China, India, and Mexico were residing in the United States, while most buyers from Canada and the United Kingdom were non-resident buyers.
The survey report released by the National Association of Realtors also reveals that nearly half of the foreign sales were in their states – Florida, California, and Texas. This year’s total of the purchase by the foreign buyers and recent immigrants marks a 49 percent jump from 2016 ($102.6 billion) and surpasses 2015 ($103.9 billion) as the new survey high.
Overall, 284,455 US properties were bought by foreign buyers (an increase of 32 percent from 2016), and purchases accounted for 10 percent of the dollar volume of existing-home sales, which was 8 percent in 2016.
“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of US property over the past year,” Lawrence Yun, NAR chief economist said in a press release. “While the strengthening of the US dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the US is a safe and secure place to live, work and invest.”
Indian purchased 14,943 properties and the average purchase price is $522,440. Compared to other major foreign buyers, Indian buyers are not as concentrated in any state. While California, New Jersey, Texas, Massachusetts, and Kentucky were top destinations, more than two in five Indian buyers purchased properties to use a primary residence in these states where they most likely found jobs.
The report said that the dollar’s strength against some currencies made a US property purchases less affordable for some foreign buyers. It points that the Indian rupee depreciated modestly relative (two percent) to the dollar over the entire survey period. However, the government’s demonetization of large currencies caused a severe liquidity squeeze but the rupee reversed course and began to appreciate against the dollar.
The report adds that buyers from India, most of whom are resident foreigners buying primary residences, obtained mortgage financing from US sources while most foreign buyers from Canada and China made all-cash purchases.