Since the Australian dollar reached parity with the U.S. dollar, America has seen a surge of Australian home investors this year. It seems there are quite a few real estate companies who actually lure Australian investors with a good size number of homes available that are quite affordable.
The Australian dollar has surpassed the U.S. dollar this year; the first time since 1982. With the average homes in America costing considerably less than other areas, it makes sense that overseas investors would be tempted to invest in such a prime market.
According to Morgan Stanley, about 6.5 million U.S. homes are facing repossession and already 2.5 million have been repossessed since 2005. A 26 percent drop in home price since 2007 has been noted as well, with average U.S. price at $170,500. Compared to the average price in Australia of $460,000, the U.S. market is luring investors serious about making long term investments in housing.
According to a report by NAR, approximately 2,000 U.S. homes were purchased by Australian and New Zealand residents up to March 31st of this year, which is about 1 percent of purchasers. Another 42 percent worth of U.S. homes were purchased by individuals from Canada, Mexico, and the U.K.
Though Australians most likely will not have a significant impact on the national market, they can impact certain local markets such as Florida, Texas, California, and Arizona. Approximately 53 percent of foreign home purchases were purchased in these four states alone.
Florida is a hot spot for overseas investors. With a high rate of foreclosures and a comfortable climate, it is a prime location for investing. Aran Dunlop, for example, moved to Florida from Melbourne in July to purchase foreclosures in the hopes that down the road he’ll be able to cash in for a significant return when property prices go back up. Dunlop has purchased several properties and rents them out for $750 and $400 a month. He is also in the process of buying three apartment buildings to increase his cash flow. He states that he is pleased with the very high rental returns and easy cash flow and plans on investing not only in Florida, but the Atlanta area as well.