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Weak Dollar Is a Huge Draw for Foreign Investors in US Real Estate
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 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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| Some other articles by Jeff Garrison | |
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