While COVID-19 travel bans and economic conditions created by the pandemic have slowed the number of international home buyers, sales haven’t stopped.
To gain a better understanding of the international business transactions in the 75 countries that have formal relationships with the National Association of Realtors® Research Group and the Member Engagement Group conducted a survey to gather information on the transactions of respondents with international clients during the reference period of July 2019 through June 2020. The survey defined an international client as one who is not a citizen of the country of the respondent. Respondents were asked about the characteristics of five closed transactions.
International Business Trends
The 495 respondents identified 48 countries as their business area. The countries with the largest number of respondents that accounted for at least 3% of the respondents were Mexico (24%), Spain (11%), Italy (6%), Philippines (6%), Portugal (6%), India (5%), Jamaica (5%), Greece (4%), Costa Rica (3%), and Canada (3%).
• Thirty percent of respondents reported a decrease in their international client business during the period of July 2019 through June 2020 compared to the prior 12-month period.
• Twenty-seven percent of respondents reported a decrease in their international business over the past five years. The higher fraction of respondents who reported a decrease in international business in the past year compared to five years ago likely reflects the impact of the COVID-19 travel bans and the economic impact of the pandemic on international transactions.
• Among the 472 respondents who provided information (excluding those who are not engaged in any sales transaction), 68% reported they conducted a business with an international client during the period July 2019 to June 2020.
• Nearly three-fourths of respondents reported that the international client contacted them directly or found them through a website.
Origin of Foreign Buyers
Respondents reported that their foreign buyers came from 48 countries. Buyers from the United States accounted for 23% of all reported foreign buyers, followed by foreign buyers from Canada and the United Kingdom that each accounted for 9% of foreign buyers. Other top countries of origin were France (7%), Germany (5%), China (4%), Italy (3%), Spain (3%), Brazil (2%), Mexico (2%), Belgium (2%), and Russia (2%).
Foreign Buyer Residential Purchases
Sixty percent of respondents reported that prices in their home countries are less expensive than prices in other countries.
• About 57% of respondents reported that the price of the properties purchased was $250,000 or less.
• Sixty-five percent of respondents reported that the foreign buyer paid all-cash.
• Nearly half of foreign buyers purchased condominiums.
• Slightly more than half, at 56%, intended to use the property as a vacation home or a rental.
• Respondents cited a variety of reasons why the client decided not to purchase a property. “Could not find a property,” “cost of the property,” and “difficulty moving money” were the top reasons why the client did not purchase a property.
To find out about other products from NAR’s Research Group, visit https://www.nar.realtor/research-and-statistics.