Education
US sales to foreigners down but they are buying higher value real estate
Total property sales in the United States to international home buyers have decreased from last year, but in terms of price the sales dollar volume increased 13%, the latest data from estate agents shows. From April 2014 through March 2015 total international sales were estimated at $104 billion, compared to the previous year's estimate of $92.2 billion, according to the figures from the National Association of Realtors. In 2014 sales transaction to buyers outside of the US dropped 10%, possibly due to the strengthening of the US dollar in relation to international currencies and weakening foreign economies, according to NAR chief economist Lawrence Yun. ‘However, the amount of money spent has increased; this means international purchasers in the US have become an upscale group of buyers, spending more money on fewer homes,’ he explained. In 2014 five countries accounted for 51% of all purchases by international buyers. These were led by China, followed by Canada, Mexico, India and the United Kingdom, the data also shows. For the first time, buyers from China exceeded all other countries in terms of units purchased and dollar volume, purchasing an estimated $28.6 billion worth of property. Buyers from Canada followed with $11.2 billion in purchases, followed by India with $7.9 billion, Mexico with $4.9 billion and the UK with $3.8 billion. International buyers tend to purchase more expensive properties with the average purchase price being $499,600, compared to the overall US average house price of $255,600. Chinese buyers typically purchased the most expensive properties, at an average price of $831,800. Some 35% of real estate agents reported working with an international client in 2014, up from 28% in 2013 and 46% said international buyers were seeking main homes, 20% wanted buy to let and 26% was for investment rentals. Global buyers also purchased properties for commercial rentals and as residences for children studying in US educational institutions. Indian buyers were the most likely to purchase a primary residence with 79% doing so, while Canadian buyers were most likely to purchase property as a vacation home with 47% doing so. While international buyer clients purchased property across the nation, four states accounted for half of all international sales: Florida, California, Texas and Arizona. Florida remains the top destination for international buyers with 21% of all foreign purchases, followed by California at 16%, Texas at 8% and Arizona 5%. Chinese buyers tended to gravitate towards the West Coast, which provides ample education, business and trade opportunities, while Canadians seeking winter vacation opportunities focused on the Southwest and Florida. The majority of international purchases, some 55%, were all-cash, compared to about 25% of all purchases made by domestic buyers. Mortgage financing tends to be an issue for non-resident international clients because of a lack of a US based credit history or Social Security number, difficulties in documenting mortgage requirements, and financial profiles that can be different from those normally submitted to financial institutions by domestic residents. Continue reading
Slowdown has led to boost for Spain’s long term property rental market
The economic downturn has led to a significant rise in the number of people renting a home in Spain for the long term with strong demand from nationals and foreign residents, new data shows. Overall the Spanish rental sector has doubled in the last five years, according to the data from the country’s National Statistics Institute and figures also shows that yields are up to 7.6% for long term lets. Indeed, improving yields has prompted many investors to turn to Spain as the next buy to let destination of choice with data from Idealista showing that yields have increased from 4.7% a year ago, to 5.3% currently. Popular tourist areas, such as Las Palmas de Gran Canaria offered returns of up to 6%. A modern, one bedroom apartment with sea view can be rented out for €700 per month, while a spacious three bedroom townhouse with sweeping views of the bay and port costs from as little as €145,000. Nor is it just tourist areas that offer strong returns. The highest yielding area, according to the Idealista figures, is the Catalonian regional capital of Lleida, where returns have reached 7.6%. A two bedroom, three bathroom, high spec apartment with balcony there can be picked up for €207,800. The news that Spanish rents rose for the first time in seven years in the first quarter of 2015 is further attracting the interest of buy to let investors with their eye on solid returns. According to Fotocasa, the average price of rental accommodation rose by 2.8% during the first quarter of this year, to €6.96 per square metre per month. Added to all of this is the surge in demand from tenants, with the size of the rental sector more than doubling from 7% just over five years ago to 16.6% in 2014, according to figures from the National Statistics Institute's Continuous Household Survey. ‘The past few years have seen a significant increase in the number of people in Spain looking to rent property on a long term basis,’ said Martin Dell, Director of Kyero.com, the portal which lists property sales, holiday rentals and long-term rentals. He added that Kyero's long term rentals site has experienced strong demand, from Spanish nationals and from foreign residents, while the firm’s sales site has received interest from investors looking to build up buy to let portfolios while property prices remain low. While more than half of rented homes house foreign tenants, Spanish nationals are increasingly looking to rent due to the flexibility that doing so provides. Following nearly a decade of high unemployment, the Profile of the Tenant in 2014 study has revealed that labour mobility is the main reason that many opt to rent a property rather than purchase one. The same study provides an interesting insight into the average tenant, who is aged between 35 and 44 years old, married and with a university education. They are professional tenants with families. Some 22% are looking to rent due… Continue reading
Research reveals how properties near top schools and universities hold value
Properties in England and Wales located close to independent schools and university towns hold their value and are able to recover faster from a housing market downturn than average UK properties, new research shows. Overall average property prices of homes within a two mile radius of an independent school have outperformed the national average. House prices close to independent schools currently stand at 116% of their 2007 market peak, this compares to 98% for England and Wales as a whole. In 2014 the average property price stood at £173,500 while the average price paid for a property within a two mile radius of an independent school was £354,000, according to the study published by estate agents Hamptons International. The same pattern can be seen in the capital’s housing market. In London property prices are on average 30% higher than at the peak of the market in 2007 but for those homes close to an independent school they are 66% higher. Homes near to some of London’s best known schools have significantly outperformed the London average. Properties close to Westminster School are now 100% higher than the 2007 peak and at St Pauls School are 75% above peak levels. In the South East and South West of England average house prices have returned to 2007 levels, but for those homes close to independent schools values are on average 17% higher. The research also found that the South and South West of England attract the greatest number of overseas students. Two thirds of universities with more than 10% overseas students are located in the South and South West of the country. It pointed out that universities contribute to local economies and act as a support to house prices and rental growth. Furthermore universities often attract large scale employers, such as the science parks around Cambridge and Oxford, who in turn generate demand for housing. ‘The UK is recognised the world over for the quality of its education. For many overseas parents with children studying in the UK this is a catalyst to investing in property – be this a student flat or larger family home. The UK’s stable legal and political system, together with an economy that is growing some three faster than the Eurozone, makes the UK an attractive proposition to many overseas investors,’ said Fionnuala Earley, director of research at Hamptons International. ‘While house prices across England and Wales remain 10% below their pre-crisis peak, this figure masks significant regional variations. The average house price in London is now 30% above the 2007 market peak and other areas of the country are playing catch-up. Capital values in London may have softened recently but they are still 12% higher than this time last year. And as the recovery spreads, so the prospects for the rest of the country are looking good,’ she explained. ‘For overseas investors looking to buy in the UK our research shows that average property prices within a two… Continue reading
