The National Association of Realtors (NAR) is reporting that thanks to foreign investors, the housing market is beginning to make a recovery. These non-American buyers have purchased $82 billion worth of US homes with $7 billion being Chinese and the second largest investors to the Canadians.
Chinese business owners and possibly government representatives are acquiring a large amount of American real estate with $2 billion in commercial properties in 2011.
The NAR also says that Japanese investors are “buying up America’s landmarks” which has been hailed as an “economic miracle”. The Japanese are interested in owning “high-priced hotels, golf courses, office buildings and condominiums.”
Since 1993, the Japanese have been able to assist the American investor in purchasing “distressed assets” (i.e. foreclosed real estate) by lowering the market values which created astronomically low purchase prices. Now the Chinese from Hong Kong are bringing their money to American shores, buying up properties at an alarming rate.
Canadian investment in US real estate has between 1994 to 1998 to 20.0% along with Germany and the Netherlands.
The NAR praises this boom in foreign investors are a conceptual move from traditional to non-traditional investing. New York is seeing an obvious increase in sales to foreign investors which as contributed to the increasing pace of real estate transactions; while not increasing the value of those properties.
CB Richard Ellis, global real estate advisory firm, asserts that foreign money flooding the US real estate markets means a 1.5% increase to Americans. As property in America is moved into the hands of Asian business-owners and government representatives large portions of New York City, Washington DC, Boston and San Francisco are disappearing from the control of Americans.
In the Miami and Fort Lauderdale areas of Florida 10% of client investors are foreign which accounts for 50% of their business transactions. This trend has been going strong since 2010.
This move is touted as an attempt to turn foreign currency from the implosion being committed in the Euro-Zone. And in protecting their ability to use their fiat currency, investing in hard assets (i.e. property, land) is ensuring the wealthy remain so regardless of whether or not fiat currencies are destroyed across the globe.
The Obama administration is pushing for auctions of foreclosed to foreign investors in bulk sales. The foreclosed properties held by Fannie Mae, Freddie Mac and the Federal Housing Agency (FHA) are of the utmost importance to unload onto foreign investors. By setting the stage for easy money from foreign investors, Obama ensures that those investments are given a major return as more properties are given up for rent rather than resold.