Moreover, investments made by foreign nationals, especially Chinese, feed into the relative devaluation of the American dollar compared to other currencies. The United States as well as Canada and Australia are considered safe havens for foreign investments.
Although Chinese nationals are technically not allowed to make transactions over $50,000 beyond their border, many have transferred billions to overseas accounts. This illegal activity on their part could potentially lead to another housing bubble.
A report by the Financial Buzz says, “This trend is a cause of concern for real estate watchers as a similar situation arose in 2007 just before the crash of 2008, when wealthy foreign buyers were purchasing expensive homes in cash. In response, the US government has to shed its lackadaisical attitude towards real estate markets and curb foreigners from purchasing residential property in American cities that are for money laundering purposes.”
The National Association of Realtors (NAR) tells MHProNews foreign real estate transactions in the U. S. rose 35 percent in 2014 to a total value of $92.2 billion. ##
(Photo credit: Getty Images--Paul J. Richards)
