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Weak Dollar Is a Huge Draw for Foreign Investors in US Real Estate
from: By Jeff GarrisonThe 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 US 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.
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 (C) 2005 A1-Foreclosure.com
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More free information on investing in REO free foreclosure listings.
About the Author
Jeff Garrison is a staff writer for A1-Foreclosure.com.
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