According to the real estate services firm JLL, foreign investments totaled 24.1 billion dollars at mid-year compared to 23.6 billion for all of 2014. JLL only keeps track of transactions greater than 5 million dollars so some hotels and multi-family developments were excluded. The CoStar group, another commercial firm, has the total spent at nearly 39 billion.
Chinese investors have taken a large portion of the investor market. They accounted for 1.9 billion dollars in the second quarter of 2015. Many investors are looking for a safe place to keep their money while the Chinese economy has struggled and the US continues to have very low interest rates. Interestingly, instead of putting away money in large lavish personal residences as seen in other years, these investors have shifted towards more humble, income producing commercial and residential properties.
In 2014, 28% of foreign investment came from Chinese investors. They spent 104 billion in total in 2014. To put that in perspective, Canada came in second place at 11.2 billion spent.
So long as the US economy continues to strengthen and so long as interest rates remain low, it would be logical to expect foreign investment to hold true, if not increase. Foreign investment will help deepen the housing market overall. Domestic investors might not enjoy the increased competition, but having that competition can really help individual buyers and sellers sell and buy at a great price.
Hart Real Estate Solutions