Foreign Home Buying Losing Momentum in CA
According to a newly released CAR study “International buyers are accounting for the smallest share of California home sales in 8 years as prices continue to rise and foreign investors slow buying”.
The share of international buyers peaked at 8% in 2013, but is now down to less than 4%.
Buyers from mainland China, Hong Kong and Taiwan made up 43% of international purchases in California this year, followed by 8% each from Mexico and South Korea.
According to Leslie Appleton-Young, chief economist for the CAR, “Chinese purchasers may be slowing because it is difficult to move money abroad”.
It may also be due to the collapse of the Chinese stock market.
The Shanghai Composite Index which peaked June 12, has fallen almost 40% from its high and the country’s currency was devalued against the US dollar in August.
China has limited individuals to spending no more than $50,000 overseas and the central government has ramped up anti-corruption campaigns amidst the slowing economy that has seen turmoil in recent months.
Across the U.S., buyers from China, Hong Kong and Taiwan spent an estimated $28.6 billion on homes in the 12 months through March, more than double the $11.2 billion spent by No. 2 Canada.
The findings are based on a survey conducted in June of about 1,000 real estate agents.
Since 2008, the first year agents were surveyed on the subject, results have shown foreigners representing at least 5 percent of transactions.