Once a conspicuous force in many of the world’s major cities, foreign buyers mostly disappeared from global prime property markets when the Covid pandemic shut down international travel in 2020. As restrictions lifted and economies started to recover in 2021-2022, overseas buyers began to return to many property markets, but in smaller numbers and with different priorities and challenges than before the pandemic.
International buyers are being met with headwinds in some markets, particularly from governments seeking to control speculation and demand from overseas buyers. For instance, the Singaporean government increased the Additional Buyer’s Stamp Duty for foreign buyers from 20% to 30%, and the Australian government doubled the fees required to be paid by overseas property investors.
Canada introduced a two-year national ban on overseas residential property buyers beginning in 2023. And while not directly targeting foreign buyers, a new tax for property transactions over US $5 million in Los Angeles beginning in April 2023 will apply to overseas buyers.
International buyer-sales transactions declined in nearly half of the luxury markets. Based on a study of Forbes Global Properties members, nearly half (42%) of surveyed luxury property markets reported declines in the number of overseas buyers of luxury homes in 2022 compared to the same period five years ago.
Potential homebuyers from Asia purchasing in the U.S. have been negatively impacted by exchange rates, interest rates (both in their own countries and locally) and in some cases the ability to transfer funds to the United States, causing lower foreign investment in several regions across the globe than before Covid.
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Despite lower overall numbers of overseas buyers compared to five years ago, markets like New York City and Miami which have traditionally been hubs for international buyers saw a year-on-year uptick in foreign buyer interest in 2022 as compared to 2021 as the world began to reopen. Property in these markets has long-term appeal for risk-averse overseas buyers.
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Nearly a third of surveyed markets reported that the number of foreign buyers had exceeded 2017 levels. In Dubai, foreigners grew to about 30% of luxury home buyers in 2022, due in part to the UAE’s new infrastructure, tax and investment opportunities, economic growth, as well as its dynamic approach to adapting immigration regulations to attract private wealth, capital, and talent.