Photo: Fifth World Art
“#CHINA IS ON REAL ESTATE BUYING SPREE ALL OVER USA,” tweeted Cher this month. “#ZILLOW Has Agreed 2Make Their Listings Available 2 CHINESE CONSUMERS. BOYCOTT #ZILLOW.”
The pop music superstar’s tweet arrives after data from the National Association of Realtors shows China is the biggest spender on US real estate. China splashed $22 billion on American property in the 12 months to March 2014.
Indeed, Andrew Taylor, Co-Chief Executive Officer of leading Chinese portal Juwai.com will be one of the “influential thinkers” speaking at the Brisbane Global Cafe event, before the main G20 Leaders’ Summit next month, addressng China’s investment in global property markets.
According to Juwai’s figures, in the first half of 2014, the top country for Chinese buyers was the United States, followed by Australia, the United Kingdom, Canada and Germany.
Is Cher’s panicked tweet correct?
Today, an auction finishes for a bundle of more than 6,000 foreclosures in Detroit. The bidding is led by one anonymous group, who will pay $3.2 million for the dilapidated buildings.
The opportunity has sparked speculation that Chinese investors could be interested in the portfolio, with interest from Chinese buyers in the bankrupt city almost as well documented as Detroit’s need to cull the number of empty buildings. (One campaign recently called for demolishing 10 per cent of them, while Wayne County has already started foreclosure proceedings on 56,000 homes this year.)
New figures from the National Association of Realtors, though, show that international presence in the US property market is on the decline.
Pending home sales edged up 1 per cent in September 2014 compared to the previous year, reaching their second-highest level since in the past 12 months, while existing home sales rebounded to their highest annual pace of the year.
The rise, though, is being fuelled by the return of local buyers, encouraged by the market’s recovery – as evidenced by the median existing home price reaching $209,700 last month, 5.6 per cent up year-on-year and the 31st month of annual price gains in a row.
Lawrence Yun, NAR chief economist, says moderating price growth and sustained inventory levels are keeping conditions favorable: “Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline. Traditional buyers are entering a less competitive market with fewer investors searching for available homes.”
Indeed, all-cash sales of existing homes made up 24 per cent of transactions in September, up slightly from August (23 per cent) but down from 33 per cent in September of last year. Individual investors, who account for many cash sales, purchased 14 per cent of homes in September, up from 12 per cent last month but below September 2013 (19 per cent).
The share of first-time buyers continues to underperform historically, remaining at 29 per cent for the third consecutive month, but conditions are improving for domestic house-hunters in general.
“Housing supply for existing homes was up in September 6 per cent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,” adds Yun. “Additionally, the current spectacularly low mortgage rates should help more buyers reach the market.”
What about the auction? Local developer Herb Strather claims that he is the leader of the anonymous group. Strather told The Detroit News that he wanted to work with community groups and churches to redevelop the properties.
“We were concerned that these parcels would get in the hands of outsiders,” he said.
Source: The Movechannel