The Association of Foreign Investors in Real Estate has concluded its survey of foreign real estate investment throughout 2013 by once again naming the USA as the most ‘stable and secure’ market for foreign real estate investment. The nation decisively defeated its closest rival, Germany, with a margin of more than 50 percentage points, in a result that confirmed the USA’s status as an attractively reliable option for international investors.
AFIRE looks at several different criteria when compiling its study, providing an intriguing overview of the global real estate market. The USA also came top of the rankings as the country with greatest prospects for capital appreciation, receiving more than 20% of respondents’ votes to relegate Spain to second position. Happily, almost 50% of respondents to AFIRE’s survey reported expectations of a modest increase in their portfolio in the coming year, with 20% even planning a major increase.
Furthermore, the survey suggested that attitudes towards the American real estate market have become increasingly positive since the start of 2013: 30% of those surveyed stated that they felt more optimistic about the market at the end of the year than at its start. The association’s chairman, Steven Hanson, welcomed the upbeat results for the US, noting that “foreign investors’ continued and growing interest in the US real estate markets reflects fully functioning capital markets for both debt and equity that provide access to a broad range of investment opportunities”.
The US real estate market’s dominance of the survey results was halted by the assessment of the best global city for foreign investment, which this year went to London for the first time since 2009, pushing last year’s winner, New York, into second place. James Fetgatter, AFIRE chief executive, praised the UK’s lack of investment restrictions and favourable tax regime for foreign buyers, citing them as key factors supporting the city’s popularity. In the last year, London has seen a record number of major foreign property deals. With the exception of the British capital, the top five was an American affair, with San Francisco taking the third spot, followed by Houston and Los Angeles. However, the top ten was somewhat more international, with Tokyo, Madrid, Munich, Paris and Washington DC completing the rankings.
Looking at the emerging markets, China eclipsed Brazil to claim the number one spot. However, the top five retains a strong focus on Latin America, with Mexico, Colombia and Peru also showing improvements year on year. This is supported by the fact that the majority of investors reported expectations of increasing their Latin American property portfolio in 2014.
If you’re thinking of investing in foreign property, Engel & Völkers can help you navigate these complex international waters. Whether you’re interested in a booming market such as the US or Germany or are intrigued by the potential of emerging markets, with established offices all around the world we have the skills and expertise to provide localised assistance every step of the way.