The saying goes that all real estate is local, but in our global economy, not all buyers are local. In fact, according to NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate, foreign buyers purchased more than $102 billion worth of U.S. residential real estate in 2015.
With people from across the globe investing in the U.S. housing market, it has become more important than ever for Realtors® to be aware of how currency values affect the purchasing power of foreign buyers. That was the subject of the today’s panel “Currency Fluctuations and the Impact on Global Real Estate” at the 2016 Realtors® Conference & Expo.
Darren Connor, senior account manager at Moneycorp, spoke about how changes in currency exchanges rates affect the costs of residential real estate in the U.S.
“Imagine you have a buyer from the U.K. who wants to buy a $250,000 home. In June 2016 the exchange rate was £1 equals $1.48, meaning the U.K. buyer would spend £168,918 on the house,” said Connor. “In October 2016 the exchange rate changed to £1 equals $1.22, meaning the same house would cost the buyer £206,987 , a difference of £36,000.” While no one can time the market or currency fluctuations, having an understanding of the currency exchange market can help Realtors® save their foreign clients tens of thousands of dollars.
Here are the current exchange rates for the top five countries of origins for foreign buyers according to NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate:
1 U.S. Dollar = 1.34 Canadian Dollar
1 U.S. Dollar = 19.08 Mexican Peso
1 U.S. Dollar = 66.75 Indian Rupee
1 U.S. Dollar = 6.75 Chinese Yuan
1 U.S. Dollar = 0.80 British Pound