California: the new choice for foreign buyers looking for luxury overseas homes
For years, cities such as Paris and Shanghai have been the destinations of choice for buyers looking for luxury overseas homes. Now, however, increasing numbers of investors are heading to California which is seen as a safe haven.
Reuters reports that ‘wealthy European and Asian investors who have dominated the market for addresses in London's most fashionable neighbourhoods are frequently outbidding locals for assets in the Golden State’. Keep reading to learn more about the high demand for luxury homes on America’s West Coast.
California enjoying biggest influx of foreign buyers for years
Simon Lyons, a high net worth property specialist, told the news agency: “It is now London and Los Angeles, not Shanghai or Moscow, that interests the cash-rich international investor.”
Recent data from America’s National Association of Realtors showed that international sales reached $82.4 billion (£53 billion) in the year to March 31, up from $66.4 billion (£42.7 billion) in 2011.
The data shows that cash purchases accounted for 62 percent of international sales and the average price paid by international buyers was $400,000 (£257,450) against the overall U.S. average of $212,000 (£136,450).
David Parnes, a director at a Los Angeles-based realtor specialising in luxury homes said that Los Angeles is enjoying its biggest influx of foreign capital for years.
"Investors are now snapping up foreclosures in greater numbers because comparatively low property prices mean they are able to achieve strong returns," he said. "Prices in L.A. are showing to 60 to 70 percent discounts against their equivalent in Manhattan."
Nick Marr, director of overseas luxury homes specialist HomesGoFast.com believes that investors view California as a safe haven compared to other troubled areas. He said: “Considering recent troubles in Spain and Greece the future of the Euro is in doubt. So, it’s no surprise that wealthy investors consider the USA a safer proposition.
“With recent price adjustments in the USA, investors are able to benefit from great returns which perhaps aren’t available elsewhere.”