Taking benefit of the slump in the American housing market, Indians spent USD 5.8 billion in FY 2014 to purchase real estate in that country, a latest report has said.
China tops the list of foreign nationals with USD 22 billion in real estate investment for the one year period ended March 2014, the National Association of Realtors said. China is followed by Canada (USD 13.8 billion); India and Britain with USD 5.8 billion each and Mexico (USD 4.5 billion), it said.
According to the report, buyers from India are locating in urbanised areas and states that are home to IT companies such as California, New York and North Carolina.
Within markets in an individual state, it is not unusual to find concentrations of people grouped by nationality, it said adding that one could speculate that word-of-mouth and shared experiences influence the purchase.
Over the 12 months ended March 2014, the report said, buyers from India purchased US properties estimated at USD 5.8 billion in total value, which is approximately 6 per cent of total international sales. Based on data from the survey, Indians were not as concentrated in a few key states as buyers from Canada, Mexico or the United Kingdom.
Among the reported destination states for buyers from India, the top states were California, Illinois and Pennsylvania. The median price was USD 342,857 and the mean price was USD 459,028.
In contrast to other buyers, only 23 per cent were all cash sales. Indians mostly purchased single family detached homes, but about six per cent bought for commercial/rental use. The properties were mostly in the suburban area and intended for residential and longer-term use, the report said.
Los Angeles, Las Vegas, Chicago, Dallas, and New York were the five markets of greatest interest to potential Indian buyers, the report said. The dollar volume of residential purchases by residents and non-residents is estimated at USD 92 billion for the 12 months ended March 2014, a 35 per cent growth from the previous year. This accounts for approximately seven per cent of total existing home sales of about USD 1.2 trillion over the same period.
The continued recovery in the countries of origin of international clients as well as the healthy pace of growth in China and the appreciation of some currencies against the US dollar such as the Chinese yuan and British pound appear to have enhanced the affordability of purchasing US property, the report said. "Canada, China, India, Mexico and the United Kingdom remain as the major sources of buyers in terms of number of transactions; Canada ranked first. In terms of dollar value of sales, China ranked first, because Chinese buyers purchased more expensive homes than was the case for Canadian buyers," the report said. "In terms of location, Florida, California, Arizona, Texas and New York are the top preferred locations based on the number of reported purchases," it said.