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Chinese money rushing into U.S. residential real estate
Al Jazeera America ^ | 12/18/2013 | by Duarte Geraldino
Posted on Sunday, January 12, 2014 3:01:29 PM by SeekAndFind
Quote:
New York) – The strong recovery of the housing market is attracting international buyers in record numbers reaching $82 billion in 2012. The National Association of Realtors (NAR) reports that after Canada, the People’s Republic of China (PRC) shows the strongest demand for U.S. residential property.
Seems quite clear and makes sense when one realizes that a lot of property here in Vegas is being bought up for cash by foreign buyers. Are we selling our country off to the Chinese?
It's not solely one group. There are some Chinese buyers. There are some Canadian buyers. There are plentu of American real estate businesses making a killing by renting houses out to the same people who were recently foreclosed upon.
The rich. I am currently staying in a friends condo. He owns three of the units in the building. I met another guy at the gym who owns two. It definitely isn't the middle class propping up our market and it shows how intense income inequality is in America today.
I don't think this is anything new. Property in Canada and China is quite expensive from what i've read. People with money look for yield and the yields for U.S property can be a lot better and more secure than stocks or lot's of other investments.
In places like Miami , Latin American buyers especially Brazillians are huge buyers in the area. The reason is that their economy has developed creating a lot of wealth .
Brazil is now #7 in GDP in the world.. right under the UK
Apparently, if a foreigner invests $500k in real estate in this country, the entire family is entitled to permanent visas. Yes, you can buy 2 residences with that $500k and rent out one of them!
Let them try that in Mexico sometime! The legislature in Mexico City is working on amending their property rules, whereas they'll allow a foreigner to buy a house down there, but don't let them catch you renting it out, or they'll confiscate the property. Good idea!
Apparently, if a foreigner invests $500k in real estate in this country, the entire family is entitled to permanent visas. Yes, you can buy 2 residences with that $500k and rent out one of them!
Let them try that in Mexico sometime! The legislature in Mexico City is working on amending their property rules, whereas they'll allow a foreigner to buy a house down there, but don't let them catch you renting it out, or they'll confiscate the property. Good idea!
The Fed through its agencies (Fannie / Freddie) has been buying up much of the banks bad debt and then slowly bleeding the supply into the market. "Controlled descent", in the meantime they've tried to buoy the market - especially the appraisal valuation entities within municipalities because you will get massive amounts of city / municipalities going bankrupt if significant amounts of inventory is revalued at appropriate market values.
Real Estate 101: Residential real estate is only worth as much as the income as those living in them. With the stagnant and declining median household income of the past few decades, the housing values in about 80 percent of the markets (outside of immigrant gateway cities, and constricted development markets; California) will get ratcheted significantly lower and trigger declining city and municipal revenues through property taxes. It is a rolling cascade toward bankruptcy.
As for China, check out Chinese Plan City in Adirondacks
Seems quite clear and makes sense when one realizes that a lot of property here in Vegas is being bought up for cash by foreign buyers. Are we selling our country off to the Chinese?
We now live in a world economy. Property in the US is purchase by foreign investors who see value here just as US investors and retirees for that matter see value in markets such as Mexico and Costa Rica.
Looking forward, I see an environment where the US attracts the wealthy from throughout the world to live in the desirable areas while US citizens who can no longer afford to live in the US especially after retirement will opt to move to countries where there retirement dollars will afford them a better lifestyle.
Its said 40% are investors investing in fixed assets. Look at London I believe its even higher per centage.China is controlling the property market and price raising quickly ;so of course assets here look cheap as to investing. With interest rates rising and Dodd/Frank look for less home buyers as they scrambled to buy before rates climbed and it went into effect tightening lending.
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