5 cities with the highest cross border real estate activity in 2018

20230526050756_64703eacd86e9.webp

Asian investors are the largest group snapping up foreign property according to research. But in which cities are they investing? And why?

 

As more people's attention is being drawn to real estate as an asset class, a larger number of people are seeking out foreign property. 2017 saw a large number of Asian investors enter the market sweeping up properties from the US to Canada straight to France. Recently, contrary to expectations, their attention is being drawn to residential and commercial properties in London, UK.

 

Propertywire's first quarter of 2018 stats https://www.propertywire.com/news/global-news/londons-commercial-property-market-top-draw-international-buyers/ reveal that overall about 5.6 billion pounds of foreign money was invested in London, with Asian investors contributing about 4.4 billion pounds or 65% of the total investments. The next highest was Hong Kong at 5 billion with Paris following from behind at 1.9 billion pounds.

 

If you're looking to invest in real estate, one of the major factors you would need to consider is liquidity. Based on liquidity, these are the top performing cities for cross-border real estate investing in 2018. This is indirectly influenced by population growth, employment growth and usually followed by an increase in home values or strong rental yield. 

 

•   New York, USA: Brooklyn and Manhattan are two of New York's favorite hot spots for foreign real estate investors. The activity of Chinese, Russian and Middle Eastern real estate investors, paying cash on high-end properties has consistently driven New York City’s real estate price upwards. With a population growth that hasn't slowed down, New York City real estate not only offers liquidity but stability for real estate investors.

 

•   London, UK: Despite Brexit, London leads the way as a favorite for foreign real estate capital. In the aftermath of Brexit, the attention to both London's commercial and residential real estate has been largely driven by a weaker pound and more affordable housing. Foreign real estate activity in London is largely funded by equity funds, institutional investments, and private capital. Units in the mid-range segments have been most popular among buyers. Presently, though, the government is setting tax constraints on foreign real estate investing as the cost of home ownership increases.

 

•    Hong Kong, China: In 2017, Hong Kong was named the "most luxurious" prime housing market for the second year running by Christie's real estate https://www.christiesrealestate.com/eng/sales/hkg . Hong Kong's housing market has shown little cooling with 4.4 billion pounds of foreign money spent by foreign investors in 2018 first quarter. The heated market in Hong Kong, as experts pinpointed, is a major reason for increased residential housing prices all through China.

 

•    Paris, France: The French economy is seeing a boom with the number of foreign investment activity reaching a 10 year high last year. The French economy exceeded expectations with a 2.2% growth, a large number of jobs created and strong real estate activity. Also with fairly stable mortgage rates, many investors are picking up properties in Paris and Bordeaux. Beyond 2018, analysts speculate the South of France will experience a strong housing demand.

 

•    Los Angeles, CA: Los Angeles may soon replace Hong Kong as the no 1 most expensive city for expats. Currently, the average price of a luxury property in Los Angeles is $2.5 million. With population growth, increasing disposable income and a thriving tech sector, Los Angeles real estate offer stability and liquidity for investors. However, housing is in short supply. A situation leading to soaring house prices. With population growth and a great economy, Los Angeles is a great option for single-family investors seeking high rental yield.

Previous Post

5 signs youre cash flow negative on your vacation rental property

Next Post

4 essential money tips when traveling overseas for work

Related Posts

20230526052910_647043a6600d1.webp

How Much Should I expect To Pay in Stamp Duty Fees When Buying Foreign Property?

  • 20, May 2023

When you hear stamp duty, don't run for cover! Stamp duty fees are only applicable in the Commonwealth of Nations countries, Singapore, Australia and a few states in the US. It is a tax that arises from the transfer of property, usually, you pay when you sell. In this case, there will be a transfer of documents. Stamp duty legally requires that these documents are stamped, this shows the amount of tax paid. This means you’re actually paying for government stamp. Where enforced, stamp duty is placed on transfer of lands, homes, buildings, copyrights, patents and securities.

Facts About Stamp Duty fees

Stamp duty can be one small additional cost to your home, especially if you're dealing with a second home or investment property. Here are some things you should know about stamp duty:

* In the UK, the government levies stamp duty tax on all share transactions, currently at 0.5%. This generates £4bn for the treasury.

* In the European Union, Germany, Sweden, Luxembourg and the Netherlands have no stamp duty.

* France charges stamp duty only for transactions above £5,000. In the US, stamp duty is more or less insignificant, only 0.003 percent is charged.

* When you deal with really big money, it becomes a problem. Stamp duty is the reason why influential fund manager, Fidelity, moved half of its £6bn UK special situation fund offshore in 2016.

* Stamp duty came into being 200 years ago in the UK and some people believe that it was the sparking flame for American Independence Movement. When it was introduced to the American colonies in 1765, it was met by protests.

* Stamp duty is only paid on brick and mortar of the house. It shouldn't feature fixtures and fittings, white goods or items of furniture as they are exempt. You pay stamp duty on land and property purchases.

* You also pay the stamp duty when you buy shares valued at more than £ 1,000, although it is a different system, and the rates are different as well.

* You do not pay it on properties in Scotland. Instead you have a Land and Buildings transaction tax on properties costing more than £ 145,000.

* In the UK, just because your property is below £ 125,000 does not mean you can ignore Stamp Duty. You still have to submit a Stamp Duty land tax return.

 

* Even though your lawyer usually takes care of it, it is your responsibility to make sure that the return and payment are shipped on time. If it is late, you will pay a fine of £ 100, plus any interest.

* If you are transferring a portion of your home to an ex-partner after divorce or separation, or if you are giving the deeds of your house to someone - as a gift or in your will - you do not have to pay stamp duty.

How Much Stamp Duty Should I Expect To Pay?

In the UK, there are several price bands for Stamp Duty. The tax is calculated by the part of the purchase price of property that falls within each band. For example, if you buy a house for £ 275,000, the tax on the stamp duty (SDLT) you owe is calculated as follows:

0% on the first £ 125,000 = £ 0

2% on next £ 125,000 = £ 2,500

5% in the final £ 25,000 = £ 1,250

Total SDLT = £ 3,750

In this case you pay £ 3,750. This will not be the case in other countries. So, it is important that you contact a lawyer in your destination country who’d give information on how stamp duty is calculated.

By Bebuzee Admin Read More
20230526052746_6470435286263.webp

3 Tips to Secure Financing for Foreign Property as a Boomerang Home Buyer in the US

  • 07, July 2023

Buyers with a foreclosure history have more to prove to the banks; hence getting loans might be tough. Below tips will help them get through the hurdles and secure financing for foreign property investment.

Are banks scared to give loans to boomerang buyers?

Applying for a loan after a foreclosure, if you're a property buyer in the US, is not a piece of cake. The lender wants to be sure of one thing: You are able to pay the loan and have learnt from your mistakes. If you're planning to buy a foreign property, getting financing becomes harder. If you do get financing, you might be immersed in a lot of paperwork.

Banks will want you to prove your income. They will look closely at your bill payment records after the foreclosure (hence the need to rebuild your credit). If you have a traditional job for which you receive a W-2 form, your lender will want to see it and verify your income with your employer. Boomerang buyers (property buyers with a foreclosure history) who work several part time jobs or are self-employed will face more scrutiny. They will have to show their income with several years of tax returns and other documents.

Yes, you might have a lot to prove to the bank when applying for mortgage as a boomerang buyer. This is why Realtor.com recommends including a letter in your mortgage application that explains the reason for foreclosure.

What Most Foreign Banks Require Before Giving Mortgage

Requirements for mortgages will vary from country to country as each country flaunt different taxation structures. Some countries will require you to open a bank account, get a tax identification number or get approval from Government housing agencies before you'd be allowed to buy a home.

You need to be conversant with the taxes that apply in your destination country. For example, foreign property buyers in Spain have to pay a wealth tax (patrimono in Spanish). Countries like South Africa also mandate a building insurance for foreign buyers.

The important thing when applying for a mortgage either as a buyer with foreclosure history or not is your ability to document everything. Mortgage has come a long way from the crisis periods and banks are more proactive. They want to verify any financial information provided.

 

 

Tips To Secure Financing for Foreign Property Investment after Foreclosure

Having a foreclosure history shouldn’t stop you from your dream of owning property abroad, here are three tips to get financing as a boomerang buyer.

1. Get equity from your US home.

Your friendliest partner will always be your property of the United States. You could get a second mortgage with 2.8% APR, only a fraction of what you will pay overseas

2. Home Collateral.

If you own a property in the United States, lenders in some countries, particularly international banks, will allow you to put that into collateral. You will have to establish that the property is free from liens. A lien will be dissuasive to the approval of your mortgage application.

3. Focus on International Banks.

When you begin to explore your financing options abroad, you must first visit the branches of foreign banks in the area where you are buying. If the same bank operates in the United States, they will have a better understanding and access to the facts related to your financial situation back home. You can even visit their branches in the United States to know your options.

These options would be effective if you work on your credit. You need to improve your credit rating when applying for a mortgage in the United States after foreclosure. The same is true anywhere in the world.

By Bebuzee Admin Read More
20230526050150_64703d3e3d1f7.webp

Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years

  • 09, January 2023

As we move into 2024 and 2025, the housing market is likely to see some significant changes. After a tumultuous couple of years, there is some optimism about the future of the housing market. However, there are also concerns about rising interest rates, inflation, and a potential housing bubble. In this article, we will take a closer look at the Housing Market Forecast 2024 & 2025 and make some predictions about what we can expect over the next five years.

Introduction

The housing market has been on a wild ride over the past few years. In 2020, the COVID-19 pandemic led to a sudden and severe downturn in the market. However, the housing market has rebounded strongly in 2021, with record-high prices and a surge in demand for homes. With the economy showing signs of recovery and interest rates at historic lows, many experts believe that the housing market will continue to grow in the coming years.

Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years

Increased demand for affordable housing

One of the biggest trends in the housing market over the next five years is likely to be an increased demand for affordable housing. With home prices at all-time highs and many people struggling to afford homes, there is a growing need for more affordable options. This could lead to an increase in the construction of smaller, more affordable homes, as well as a rise in the popularity of alternative housing options like tiny homes and mobile homes.

Continued growth in suburban areas

Another trend that is likely to continue over the next five years is the growth of suburban areas. Many people are looking to move out of crowded cities and into quieter, more spacious areas. This has led to a surge in demand for homes in suburban areas, and this trend is likely to continue in the coming years.

Rising interest rates

One concern for the housing market over the next five years is rising interest rates. While interest rates are currently at historic lows, they are expected to rise in the coming years as the economy recovers. This could lead to a slowdown in the housing market and make it more difficult for some people to afford homes.

Potential housing bubble

Another concern for the housing market is the possibility of a housing bubble. With home prices at record highs and demand outstripping supply, some experts are worried that the market may be overinflated. If this is the case, a correction could be on the horizon, which could lead to a significant downturn in the housing market.

Increased focus on sustainability

As concerns about climate change grow, there is likely to be an increased focus on sustainability in the housing market. This could lead to an increase in the construction of eco-friendly homes and the retrofitting of existing homes to make them more sustainable. Additionally, there may be an increase in the popularity of alternative housing options like tiny homes and shipping container homes, which are often designed with sustainability in mind.

Growing popularity of smart homes

Smart home technology has been growing in popularity in recent years, and this trend is likely to continue over the next five years. With the rise of the Internet of Things (IoT) and the increasing availability of smart home devices, more and more people are expected to embrace this technology in their homes.

 

FAQs

What will happen to home prices over the next five years?

It's difficult to predict exactly what will happen to home prices over the next five years. However, many experts believe that prices will continue to rise, although at a slower pace than we have seen in recent years. Rising interest rates and concerns about a housing bubble could lead to a slowdown in the market

By Bebuzee Admin Read More