Indians fifth largest investors in US Real Estate
Indians emerged as the fifth largest investors in real estate in United States. Backed by finance, Indians purchased residential property worth $7.8 billion during the 12 month period ending March 2017. These properties were mostly acquired for the use of primary residence or for use by a child studying in the US.
Chinese nationals topped the chart by purchasing residential properties worth $31.7 billion in the same period followed by the Canadians, British, Mexicans and then Indians according to “2017 Profile of International activity in US residential real estate” – a report released by the National Association of Realtors (NAR).
The report adds that between April 2015 and March 2016, Indians had invested $6.1 billion and occupied third place on the list of biggest buyers. However, a surge of investments from other nationalities resulted in Indians slipping to fifth position in 2016-17. The bulk of buyers from China, India, and Mexico were working and residing in the US, while most buyers from Canada and the UK were non-resident buyers.
More than a third of Chinese buyers purchased residential property in California. Compared to the other major foreign buyers, Indians were not as concentrated in any state in the US and the location of their jobs largely determined their purchase. While California, New Jersey, Texas, Massachusetts, and Kentucky were top destinations, more than two in five Indian buyers purchased in another state.
In aggregate, foreign buyers purchased $153 billion of residential property in US between April 2016 and March 2017, which is a 49% jump from the figure of the corresponding previous period of $102.6 billion. In terms of number of units, foreign buyers purchased 2.84 lakh residential properties in US between April 2016 and March 2017, up 32% from the previous period’s figure of 2.14 lakh properties. On an average, foreign buyers paid $536,852 for their properties, 12% more than the average price during the previous 12-month period. The average purchase price of properties bought by Indians was $522,440.
While a stronger dollar makes it more expensive to purchase US property, fears of a further weakening of a local currency against the dollar prompts some foreign buyers to accelerate their purchase. Referring to the value of the Indian rupee, the report says it depreciated modestly (by 2%) relative to the dollar over the entire survey period.