In the year to June, non-resident foreign buyers purchased an estimated US$7.97 billion worth of Florida real estate, according to a new report from the National Association of Realtors (NAR) and Florida Realtors. This compares to just US$6.43 billion in the same period a year earlier. This represents a rise of US$1.5 billion or nearly a quarter (approx. 23%).
According to the NAR’s Profile of International Home Buyers in Florida 2014report, about a third (32%) of these purchases were made by Canadian buyers. A further 24% of total spending came from buyers in the Western Europe, particularly the UK, Germany and France. Latin American and Caribbean investors were collectively close behind their Western European counterparts when it came to buying in Florida, providing a further 23% of all foreign funds. Many of these investors are resident in Brazil or Venezuela. Asian buyers made up 10%, with China alone accounting for 6%. As China represented just 1% of Florida real estate purchases by foreign buyers a few short years ago, it seems the country’s investors are rapidly taking a greater interest in Florida and in US markets in general.
Central Europe, the Middle East and Africa represented fairly small percentages of the total pot – 5%, 4% and 2% respectively.
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Overall, these figures suggest that a full 10% of the total residential market in Florida was made up of sales to foreign buyers – up from 9% last year. Furthermore, it shows the significant popularity of Florida with foreign buyers, as roughly 17% of the US$46.7 billion spent by foreigners on US properties went towards purchases in Florida. Of all foreigners buying and holding one or more US properties, roughly a quarter are believed to own at least one unit in Florida.
In terms of the number of units purchased by this near-US$8 billion pot of spending, it is estimated that international buyers snapped up around 26,500 individual properties in Florida. This compares to just 22,600 in the same period a year earlier, representing growth of just over 17%.
According to the report: "The increase in international home buying activity was driven by the continued recovery of the world economy and the affordability of US properties. Both US and Florida residential prices remain affordable to most international homebuyers." It was noted that the strong position of many currencies against the US dollar was a factor in the decision to purchase, making US properties more affordable as foreign buyers can get more for their money.
The report also went on to note that "international clients continued to purchase properties that are on the average above the mean price paid by domestic buyers."
Compared to a national average of just 28%, over half of Florida real estate agents (52%) have international buyers among their list of clients. However, this figure is down from last year’s 63%. Of these, almost one in five (19%) has at least six foreign clients, and 20% say that more than a quarter of their business comes from international buyers.
