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Cash-rich foreigners spend record $7.5B on Miami, Manhattan and LA homes

Foreign investment into the United States (U.S.) luxury residential real estate market has jumped to a new $7.48 billion high with Miami, Manhattan and Los Angeles as the key locations, says a new report by Beauchamp Estates, in association with Leslie J Garfield & Co.

In the 12 months to March 2017, non-resident foreign sales in the U.S. for property priced over $1 million jumped  72 percent from 2016. Of these transactions, 44 percent were all-cash purchases.

The report reveals that, for premium residential real estate priced above £2,000 psf,  the key locations in the U.S. for foreign buyers are Miami, New York and Los Angeles.

GARY HERSHAM

Gary Hersham, Managing Director at Beauchamp Estates said: “Despite the vast geographical size of the United States, data from the NAR shows that almost 40 percent of overseas buyer transactions are made in just three U.S. locations – Miami/Florida (26 percent), Los Angeles/California (9 percent) and Manhattan (3 percent) – and for ultra-prime property these three locations are the U.S. destinations of choice for the world’s wealthy.”

Jed Garfield, President at Leslie J Garfield & Co says: “Data from the NAR shows that just five overseas countries dominate investment into U.S. residential real estate, accounting for 50 percent of all transactions, they are Canada, the UK, China, Mexico and India.”

Jed Garfield

The new report reveals that the Miami property market is dominated (80 percent) by international buyers and occupiers, with just 20 percent of the market being attributed to domestic U.S. buyers.

The average dollar per square foot price for luxury Miami residential property is now $2,749,  with overseas buyers typically buying a 13,107 s/f  luxury residence with the most popular addresses being Miami Beach, Palm Beach and North Bay Road.

Entitled U.S. Ultra Prime Real Estate, the new report focuses on Manhattan, Los Angeles and Miami with analysis by Dataloft, the market intelligence group. The report uses local market intelligence provided by Manhattan headquartered Leslie J Garfield & Co and California based Trulia, with overseas enquiries/deals for the U.S. from London based Beauchamp Estates.

The report findings are supported by data from WealthX and the U.S. National Association of Realtors.

The Report found:
  • 72% increase in foreign investment in U.S. residential property priced over $1m (£770,000)
  • £5.78 billion ($7.48bn) new high for foreign investment into the U.S. luxury residential real estate market, over $1m (£770,000)
  • 44% of these foreign purchases were all-cash based transactions.
  • 40% of all overseas buyer transactions are made in three key U.S. Locations, Miami, New York, Los Angeles: Miami/Florida (26%), Los Angeles/California (9%) and Manhattan (3%)
  • 50% of overseas investment into U.S. residential real estate originates from: Canada, the UK, China, Mexico and India
  • Top Three factors for location choice: Life Style, Security and Safe Haven For Capital
  • Miami: 80% of buyers and occupiers of ultra prime property are international, paying an average $ per sqft price for luxury residential property of $2,749 (£2,121) and typically buying a 13,107 sq ft luxury residence
  • Miami: most popular addresses being Miami Beach, Palm Beach and North Bay Road. Island locations such as Fisher Island and Bay Point are popular with overseas buyers because of the privacy and security they provide the report adds.
  • Miami: Gated or secure homes on the waterfront are the most sought after ultra—prime homes, with trends leading towards towers, such as Missoni Baia developed by real estate magnate Vladislav Doronin with his Miami-based firm, OKO Group
  • Manhattan: 80% of buyers and occupiers of ultra prime property are international, paying an average of $3,618 (£2,786) per sq.ft and typically purchasing a 9,509 sq.ft property
  • Manhattan: Family townhouses to use as a New York home or a large lateral duplex or penthouse providing a pied-à-terre  are the most popular
  • Manhattan: Top locations for overseas buyers are Upper East Side, Greenwich Village and Tribeca. The most sought after ultra-prime homes for the ultra wealthy are large six bedroom townhouses that typically provide 4,276 sq ft of outside space and are within the vicinity of Central Park
  • Manhattan: Prices for premium homes have risen by close to 30% since 2010 and over 3.5% in 2016
  • Los Angeles: 20% of buyers and occupiers of ultra prime property are international, paying an average of $2,901 (£2,234) per sq.ft typically buying an 11,211 sq.ft mansion or large house in Beverly Hills, Hollywood Hills West, Pacific Coast Highway or Malibu.
  • Los Angeles: The typical ultra-luxury Los Angeles property provides six bedrooms, has a separate staff wing and is set in 2.55 acres of private gardens.
  • Los Angeles: Key overseas buyer groups are from the Middle East (Saudi Arabia, Qatar and Israel), China, the UK, France and Italy.

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