U.S. Real Estate Sought By Foreign Investors
Due to a Weaker Dollar
By Jeff Garrison
The weak US dollar has been good news for
real estate. Taking advantage of the favorable
conversion rates, foreign investors are eagerly picking up real estate in major
cities across the US. Who is buying and where are they
investing?
WHO IS INVESTING?
In recent years the U.S. real estate market
has seen the highest amount of investing from foreign investors in Germany,
Britain, Canada, Japan and the Netherlands. Germany was the strongest player in
2004 reporting over $4 billion in investments for that year.
face="arial, helvetica, sans-serif">Where are they buying? In the past Europeans
were drawn to East Coast properties and Asians to the West Coast. Now, because
of the lower interest mortgages and a weak dollar, foreign investors are picking up property, commercial and
residential, in all major US cities, including Chicago and Las Vegas.
CANADIANS AND AUSTRALIANS BENEFITING TOO
Even neighbors north of the border in Canada
are seeing the benefits. Although the Canadian dollar has been weaker than the
US dollar for years, many Canadians own vacation homes in the US, particularly
in Arizona. They are one of the highest volume investors in the US real estate market. Whether buying or selling, Canadians are
enjoying stronger purchasing power while the US dollar remains low.
Some Canadians, instead of buying, are
following the lead of foreign investors who are selling current US properties in
preparation for buying at an even better rate if the US dollar continues to
fall.
While Germans are slowing down in the volume
of investments due to recent caps, Australians are picking
things up. Australia, with one of the largest pension funds in the world, must
look beyond their own real estate market for investment opportunities. Investing
in US real estate permits them to invest their huge national
pension funds into diversified holdings.
HOW LONG WILL IT LAST?
Although the current mortgage rates are an
appealing draw, they will not remain low indefinitely. However, lower priced
properties such as foreclosures would make the financial investment potentially
lucrative for foreign investors despite the interest rates as long as the
dollar remains low.
Foreign investors looking for long run profits anticipate an
increase in the US dollar as an incentive to buy. Investing while the
euro is strong and the US dollar is weak means they can pick up real estate for
a relatively low investment. Already some countries are seeing up to a 35%
discount based on the favorable exchange rates. However, the aim is to hold the property
until the US dollar is strong and then the conversion to euro would be highly profitable. With the availability of properties online
it is easier than ever for investors to find properties without crossing an
ocean. Some of the best deals, such as foreclosures, can be researched and purchased without
coming to the US. This makes investing in US real estate a great opportunity for
investors no matter where they live.
Copyright 2005 A1-Foreclosure.com
Jeff Garrison is a regular contributor to
A1-Foreclosure.com, a website which provides timely real
estate foreclosure and investing articles pertinent to real estate buyers,
investors, realtors, and sellers. Includes a guide to free foreclosure listings
and other sources of investment property including foreclosures bank
owned. |
