Home away from home

By The Economist online

IN THE past year sales of American homes to foreign residents (and recent immigrants) increased by nearly a quarter to $82.5 billion, comprising almost 9% of the $930 billion home sales market, according to a recent survey by the National Association of Realtors. The sunny states of Arizona, California, Florida and Texas attracted just over half of these sales, but a state's proximity to foreign markets also makes a difference: Europeans tend to purchase homes on the east coast, Asians on the west coast and South Americans in Florida. Canadians are the biggest buyers, accounting for 24% of sales to foreigners, more than double the proportion five years ago, before the housing crash. In second place the Chinese are fast catching up; their share has increased from 5% in 2007 to 11% of sales. Both benefited from strong increases in the purchasing power of their currencies over this period, whereas Mexico and Britain, which saw their currencies slide, experienced sharp contractions in their share of foreign sales. France and Germany, the next largest European buyers, saw no change in their proportion of sales, but their shared currency did not move against the dollar either. Finally the Japanese, despite seeing the greatest benefit from currency movements, also had an unchanged share.