Jan

28

U.S. Tops Foreign Real Estate Investment List

Filed Under National Market 

Despite a growing interest in Asia, U.S. real estate, by a wide margin, has risen to the top of the global property market among foreign investors, with New York City and Washington named the top two global cities for foreign investors’ real estate dollars according to the results of the 16th annual survey released today by the Association of Foreign Investors in Real Estate (AFIRE). The survey was conducted in the fourth quarter 2007 among the association’s nearly 200 members. Collectively, AFIRE members hold $700 billion of cross-border real estate, including $230 billion in the U.S.

We do no see a great deal of foreign investments in the Spokane/CDA MSA.  It can be difficult to direct foreign dollars to a tertiary market with a smaller economic base.  However, with the weakening of the U.S. dollar there has been a noticeable influx of Canadian capital. Below are some noteworthy statistics from AFIRE’s survey. The full report can be found at www.afire.org

Top Five Global Cities for Foreign Investor’s Real Estate Dollars

     1. New York; up from #2 in 2006
     2. Washington; DC up from #4 in 2006
     2. London; down from #1 in 2006
     4. Paris; down from #3 in 2006
     5. Shanghai; up from #9 in 2006

Most Stable and Secure Countries for Real Estate Investments

     1. U.S. - 56% of vote
     2. Germany - 11% of vote; up from #3, with 4.5% of the vote in 2006
     3. United Kingdom - 8.8% of vote; down from #2, with 11% of the vote in
        2006
     4. Australia - 8.8% of vote; up from #5, with 3% of the vote in 2006
     5. Japan - 5.3% of vote; with 3% of the vote [tied with Australia],
        unchanged from 2006

Countries Offering the Best Opportunity for Capital Appreciation
 
    1. U.S. - maintains ranking; increases percentage of votes to 26.2% from
        23% in 2006.
     2. China - moves into 2nd place from 3rd; increases percentage of votes
        to 21.4% from 14.8% in 2006.
     3. India - falls from 2nd to 3rd; decreases percentage of votes from 18%
        to 16.7% in 2006.
     4. Russia - moves from 5th to 4th; although percentage of votes decreases
        to 7.1% from 8.2% in 2006.
     4. Mexico - moves from 7th to 4th (tied with Russia); increases
        percentage of votes to 7.1% from 4.9% in 2006.

Top U.S. Property Types

Within the U.S. property market, the most dramatic change was a total reversal of investors’ preferred U.S. property types, with every property category shifting and, most dramatically, office properties falling into fifth place and retail properties rising to first.

     1. Retail - from 5th place in 2006
     2. Hotels - from 3rd place in 2006
     3. Industrial - from 4th place in 2006
     4. Multi-family - from 2nd place in 2006
     5. Office - from 1st place in 2006

Top U.S. Cities

The ranking of the top five U.S. cities echoed respondents’ choices in 2006:

     1. New York
     2. Washington, DC
     3. Los Angeles
     4. San Francisco
     5. Seattle

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