x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

US property market looks ripe for investment

Investors should keep their eye on the property market in the United States which continues to go from strength to strength.

Residential property prices in the US are currently rising at a healthy rate and yet the signs are that home values may increase further in the near term as the supply-demand imbalance in the market continues to widen.

The latest index report from Zillow shows that US property prices increased by 4.9% in April compared with the same period last year, while there are now 3.4% fewer homes for sale than there were 12 months ago.

The fall in the volume of homes on the market, particularly smaller entry level properties, is making it particularly tough for first-time buyers with bidding wars breaking out across many parts of the country, according to the report.

Svenja Gudell, chief economist at Zillow, said: “New construction has been sluggish over the past year. We’re building about half as many homes as we should be in a normal market. There still aren't enough homes on the market to keep up with the high demand from every type of home buyer.

“In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer's selling season's borders will most likely be blurred again as many buyers are left without homes and will need to keep searching.”

The latest Zillow report shows that property markets across much of the US continue to recover from the damage done during the housing bubble of 2005-07, making various parts of the country ripe property investment. 

Chinese investors are the biggest foreign buyers of US property

For many years, Canadians were the top foreign buyers of homes in the USA. But recently, Chinese investors have overtaken them to become the biggest foreign buyers of property in the country.

The National Association of Realtors says in the year ending March 2015, buyers from China snapped up $28.6bn (£19.6bn) worth of properties in the US, while Canadians spent $11.2bn (£7.7bn), and Indians spent $7.9bn (£5.4bn).

“Right now in China, the real estate market in China is bombed. Very bad. A lot of people are selling in China and buying in Manhattan or Long Island,” said Lin Pan, partner of Lin Pan International Realty.

The average Chinese buyer is spending almost double the average of all foreign purchasers and more than triple the amount spent by Americans.

“For whole United States homebuyer the average price is $255,000 (£174,460). The average price foreign buyers pay is $499,000 (£341,347). But for Chinese buyers, their number goes to $830,000 (£567,845) on average," Lin added. 

icon

Please login to comment

valpal
submit
sign up