Chinese buyers topped Canadians to rank as the biggest foreign purchasers of U.S. homes by both sales and dollar volume, accounting for more than a quarter of all international spending.
Buyers from China spent $28.6 billion on U.S. homes and made up 16 percent of transactions by foreigners in the 12 months through March, according to an annual report released Wednesday by the National Association of Realtors. Canadians, which had led international purchases since 2008, ranked second with $11.2 billion in spending and a 14 percent share of sales.
Homebuyers from China have flooded into the American market in recent years amid growing affluence by residents of the world’s most populous nation, where the U.S. is viewed as a safe haven for wealth. They’re typically buying more expensive properties, with an average purchase price of $831,800, compared with $499,600 for all international buyers.
“You look at the numbers and realize China is an expanding economy,” said Jed Smith, managing director of quantitative research for the Realtors group. “While the Canadian economy is expanding, it’s going to be smaller relative to China. I think we’ll see more Chinese buying in the future.”
Indians ranked as the third-biggest group of foreign buyers, at $7.9 billion, followed by Mexicans with $4.9 billion and Britons at $3.8 billion, according to the report. The survey groups buyers from Hong Kong and Taiwan with those from mainland China.
By number of transactions, total U.S. home sales to international buyers dropped 10 percent to about 209,000 units, indicating a stronger dollar decreased demand from abroad. Purchases by dollar volume were about $104 billion, up from the year-ago estimate of $92.2 billion, the group said.
“This means international purchasers in the U.S. have become an upscale group of buyers, spending more money on fewer homes,” Lawrence Yun, chief economist of the Realtors, said in the statement.
Florida, California, Texas and Arizona attracted more than half of international buyers. Canadians tend go to the warmer climates of Florida and Arizona, while Chinese buyers gravitate toward the West Coast, because of its proximity to Asia.
Buyers from China also have helped drive up prices in Cambridge, Massachusetts, where they seek proximity to Harvard University and Massachusetts Institute of Technology, according to Jason Zhang, an agent with Realty Direct in Quincy, Massachusetts. Many of those buyers purchase homes for their children and then buy a winter retreat in Florida, he said.
“If you go to an open house here, maybe eight of 10 buyers are Chinese, one is Indian and the other is American,” said Zhang, an agent for 10 years and a Chinese speaker. “Most Chinese want to pay cash.”
The majority of international deals -- 55 percent -- were all-cash transactions, compared with about 25 percent of home purchases made by U.S. buyers, the Realtors group said.
Landsea Group, a builder based in Nanjing, China, opened a U.S. division in 2013 to take advantage of the U.S. housing rebound and growing demand for overseas real estate by mainland Chinese, according to John Ho, chief executive officer of the company’s American division. Landsea, which has developed about 91 million square feet (8.5 million square meters) of housing in China, has projects under way in Dublin and Simi Valley, California, and Weehawken, New Jersey.
“We saw a lot of our existing customers interested in buying overseas and the U.S. is one of the top destinations,” Ho said in a telephone interview.
The U.S. surge of buying by Chinese occurs at the same time the central government in their home country is trying to control overheated markets in stocks and real estate, said David Woo, head of global rates and currencies at Bank of America Merrill Lynch.
“The housing bubble is still there,” Woo said in an interview with “Bloomberg Surveillance” Wednesday.