From the Wall Street Journal:
Insiders in the real estate industry claim they have observed an increase in the number of foreign buyers returning to the US market. International buyers have been slowly returning after a period of relative absence during the pandemic for more than a year, but insiders reported that in the last three months, their levels of interest had nearly reached pre-pandemic levels. That is due to a combination of loosening Covid regulations around the world, particularly in previously rigorous nations like China, as well as a number of political and economic developments, such the Russia-Ukraine war and the tumultuous Brazilian election.
Foreign purchasers are a significant shift in domestic markets that have been cooling as a result of rising interest rates and recessionary worries. The decline comes after a strong real estate boom, driven by Covid, that drove most U.S. markets higher in 2021 and early 2022.
“It was the domestic buyer that led the recovery out of Covid,” said John Gomes of Douglas Elliman, who said foreign buyers currently account for about 40% of his team’s business, which has offices in New York, Miami and Los Angeles. That is up from just over 30% before the pandemic. “It is the foreign buyer that is leading the recovery this time around. It’s very, very apparent.”
“It was a real unknown when and if, after the pandemic, the Chinese buyer would come back to New York,” he said.
By contrast, Corcoran Sunshine has “clearly seen a pullback” over the past 10 months in activity by local and domestic buyers, he said.As listing websites like Redfin don’t maintain track of a buyer’s country of origin, it is challenging to get information on the volume of transactions by foreign buyers. The assertions of a resurgence of foreign buyers are, nevertheless, supported by some facts.
Corcoran Sunshine, a new development marketing company that sells condos all around New York City, reported a 25% rise in foreign visits to its portfolio buildings in January 2023 compared to January 2022, with a significant increase in visitors from China and the Middle East. According to Ryan Schleis, senior vice president of research and analytics at Corcoran, the company’s portfolio saw more than triple the number of foreign visitors and more than twice the number of foreign buyers during the same period in 2022 compared to the pandemic’s slowest sales period, April through December 2020.
He ascribed the increase in part to China abandoning its zero-Covid regulations, enabling Chinese citizens to finally go to the United States with more freedom. “It was a real unknown when and if, after the pandemic, the Chinese buyer would come back to New York,” he said.
In contrast, Corcoran Sunshine has “obviously experienced a downturn” in activity from local and domestic purchasers over the previous 10 months, he claimed.
Some developers in South Florida claim to have recently noticed an uptick in demand from Brazilian purchasers. The developers of Nexo Residences, a 254-unit condo development in North Miami Beach, reported that since October 2022, amid political unrest following the nation’s presidential elections, Brazilian buyers’ interest has increased by 30%. In order to lead the political opposition to President Luiz Inácio Lula da Silva and defend himself from claims that he instigated attacks by protestors on government buildings in January, the former president of Brazil, Jair Bolsonaro, has stated that he intends to return to Brazil this month.