The Asian Real Estate Association of America Global + Luxury Summit was held in Honolulu, Hawaii from April 3 through 6, which was attended by several hundred members internationally. Dean Jones, President and CEO of Realogics Sotheby’s International Realty was a featured speaker for the third year in a row on the trends for foreign direct investment and immigration by Asian homebuyers. Jones led a panel discussion entitled “Make Your Market Matter,” which covered the way that secondary markets can become a primary focus for international buyers.
“I’m always thrilled to be included in the AREAA events both locally and globally,” said Jones. “We have an incredible story to share about the trends in our region and I hoped to inspire others to play similar roles in their markets.”
The session was moderated by Justin Kim, AREAA Executive Board Member, and included Jones representing the Seattle / Bellevue metro area along with John Reza Parsiani of Cervera Real Estate representing Miami, David Wolf of Coldwell Banker representing Chicago and Jim Wright of Century 21 representing the Hawaiian Islands. Each panelist outlined the general market trends within their region as well as the increasing influence of the Asian homebuyer both domestically and internationally. Jones played the video documentary “East Meets West” showcasing the many dynamics that comprise the dramatic rise in foreign nationals immigrating and investing in the Puget Sound region.
Above & Below: The panelists representing growth markets of Seattle, Hawaii, Chicago and Miami present to a packed room of AREAA conference members.
“What we learned was international homebuyers are comprising an increasing percentage of sales in key gateway cities,” adds Jones. “In many ways there are similarities between Chicago, Miami and Seattle. We are all secondary markets to say, New York City, Atlanta and San Francisco but given relative values, lifestyle and propensity for capital appreciation we’ve all become a primary focus.”
Jones also attended the opening general session, which focused on the economic outlook of foreign real estate investments in the US. Moderated by Rick Davidson of Century 21, the panelists included Anthony Chan of JP Morgan Chase, David Gates of HSBC and Michael Innis-Thompson of Union Bank.
The discussion covered the trends with global flow of capital, whereas in 2015 more than $104 billion in foreign direct investment in US real estate, of which 35% was from Asian countries (mostly China). The top countries included China, UK, Canada, India, Mexico and Brazil with the primary states of California, Texas and Florida as benefiting from the investment safe haven effects. This is helping grow the US housing marketing at 3.7 times faster than the US GDP growth. The experts believe this rate of growth will further accelerate by 10-percent in 2016 while US GDP is expected to slow to 2% growth this year. From a national perspective, the median home price of US homes rose by 5.4% in 2015 and is considered “recovered” from the Great Recession. The prospects for investments in the US has led to a boom of EB-5 immigration trends, which has received twice as many applications as the 10,000 granted per year (85-percent are Chinese). The US dollar has gained an average of 20-percent on most international currencies in recent years but the trending is for downward valuations, which could increase buying power from foreign nationals.
Looking ahead, the economists predicted less than a 20-percent likelihood of a US recession in 2016 with interest rates remaining low and few major policy changes given it’s an election year. This bodes well for consumer confidence worldwide. The only potential for a disruption in growth for the US housing market is a major international terrorist event. It was also mentioned that restrictions on capitol flow from China could loosen up for pension funds and individual investors in 2016, which is known as QDII (Qualified Domestic Instituional Investors) and QDII2 (Qualified Domestic Individual Investors) to which the consensus was overseas influences will be “a lot more exciting.”
The event was soon followed by a press release from Realogy, who highlighted the way that “its affiliated residential and commercial brands are tapping into global partnerships and local sponsorships” through the Asian Real Estate Association of America.
As the press release reads, “‘We are proud of the level of engagement that our brands and their franchise members have exhibited in leadership roles at the global, national and local level with AREAA as well as their leadership in sharing their expertise at these industry events,’ said Alex Perriello, president and chief executive officer of the Realogy Franchise Group. ‘Through collaboration with AREAA, we have been able to foster business connections with our international master franchise owners and domestic affiliated brokers and agents that have helped them strengthen their business strategies to better serve the needs of this growing market segment.”