Big Opportunity for Indian Developers as Indians 5th largest buyers of residential property in US

Big Opportunity for Indian Developers as Indians 5th largest buyers of residential property in US

The pall of gloom owing to protectionist policies has not kept Indians residing in the US from investing in real estate. By purchasing residential property worth $7.8 billion during the 12-month period ending March 2017, Indians emerged as the fifth largest investor in real estate in the US. Backed by mortgage finance, these properties were largely acquired for use as primary residence or for use by a child studying in the US.

Chinese nationals were the biggest buyers, purchasing residential property worth $31.7 billion in the same peri od. They were followed by the Canadians, British, Mexicans and, lastly, Indians.

Between April 2015 and March 2016, Indians had invested $6.1 billion and occupied third place on the list of biggest buyers. However, a surge of investments from other nationalities resulted in Indians slipping to fifth position in 2016-17 (see table). he bulk of buyers T from China, India, and Mexico were working and residing in the US, while most buyers from Canada and the UK were non-resident buyers, adds the report, “2017Profile of international activity in US residential real estate“, released recently by the National Association of Realtors (NAR).

More than a third of Chinese buyers purchased residential property in California. Compared to the other major foreign buyers, Indians were not as concentrated in any state in the US and the location of their jobs largely determined their purchase.While California, New Jersey , Texas, Massachusetts, and Kentucky were top destinations, more than two in five Indian buyers purchased in another state.

In aggregate, foreign buyers purchased $153 billion of residential property in US between April 2016 and March 2017, which is a 49% jump from the figure of the corresponding previous period of $102.6 billion.In terms of number of units, foreign buyers purchased 2.84 lakh residential properties in US between April 2016 and March 2017, up 32% from the previous period's figure of 2.14 lakh properties. On an average, foreign buyers paid $536,852 for their properties, 12% more than the average price during the previous 12-month period. The average purchase price of properties bought by Indians was $522,440.The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of US property over the past year, While the strengthening of the US dollar in relation to other currencies and steadfast home-price growth made buying a home more expensive in many areas, foreigners increasingly acted on their beliefs that the US is a safe and secure place to live, work and invest

While a stronger dollar makes it more expensive to purchase US property, fears of a further weakening of a local currency against the dollar prompts some foreign buyers to accelerate their purchase.

Referring to the value of the Indian rupee, the report says it depreciated modestly (by 2%) relative to the dollar over the entire survey period.

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