Foreign property investment refers to the purchase of real estate by foreign nationals. It is a major source of investment in the United States and
totaled 54.4 billion U.S. dollars in 2021. In recent years, the largest share of foreign residential buyers
, followed by China. Foreign buyers of U.S. real estate
to properties in small towns and central areas of major cities. This is probably why an overwhelming share of sales is
.
Why are foreign buyers purchasing U.S. property?
According to realtors, the main reason is to rent out the property, accounting for 37 percent of sales. Nevertheless, a about half of properties are bought either residential or for business use. A potential explanation for the popularity of rental properties is the
rising rental rates of multifamily homes in cities across the U.S. For instance, rental rates for multifamily units in Las Vegas, Nevada increased by 23 percent between October 2020 and October 2021. When it comes to
investment into commercial property, Seattle, Atlanta, and San Francisco were the most popular markets in 2021, while the
most popular property types were industrial real estate, offices, and apartments.
How have Chinese and Canadian investments developed over time?
The share of
Chinese investors in the U.S. real estate market remained somewhat constant until 2018 when it hovered at around 15 percent, before dropping to 11 percent in 2019 and then six percent in 2021. In 2019,
Chinese nationals purchased 6,300 properties in the United States, generating about 4.5 billion U.S. dollars in sales. In contrast to the relatively constant share of Chinese buyers in the U.S. real estate market, the share of Canadian buyers of residential property in the U.S. has decreased significantly since 2011. Despite this, in 2021 the total property sales to Canadian buyers in the United States reached 4.2 billion dollars.
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