Foreign Buyers: a Real Estate Trend to Watch in 2016

A new survey by the Association of Foreign Investors in Real Estate (AFIRE) to detect upcoming real estate trends has found foreign investors will dominate the market in 2016. How big of a factor might foreign investors play in your business?

Not backing down

Sixty-four percent of roughly 200 respondents plan to make modest or major increases in U.S. real estate investments, and 34% expect to maintain holdings or reinvest sales proceeds into other U.S. assets. None plans a major decrease.

Why the bump in U.S. real estate purchases?

This strong response is attributable to a number of factors contributing to the rise in U.S. purchases in real estate trends:

• Economics
  Europe’s immigration crisis, China’s economic slowdown, and Brazil’s recession make the U.S. a safe bet.

• Tax legislation
  New legislation easing taxes for foreign pension funds invested in U.S. real estate will further boost sales, simplifying the investment process and opening doors to real estate deals that won’t require property purchases with U.S. domestic majority partners, as they have in times past.

• The market
  Foreign investors from Asia, Europe, Australia, and Canada have been increasingly buying into the U.S. real estate market since the financial crisis, with purchases jumping from $5 billion in 2009 to $87.3 billion last year, in search of higher yields in retail space, hotels and apartments, warehouses, and office towers.

• Price appreciation
  The U.S. ranked first for countries with the best opportunity for price appreciation in 2016, trailed by Brazil, Spain, Ireland, and the U.K.

What markets are hot?

In the survey, New York City and Los Angeles were at the top for investments over foreign cities like Paris, London, and Berlin. For property types, multifamily and industrial led the pack, then retail, office and hotel space.

To view the original article, visit the Properties Online blog.