2014 has marked a year of growth and change in the real estate market, not only in terms of my recent announcement to open an international RE/MAX branch in Thailand, but the number of international real estate buyers attracted to the U.S market as well. I look forward to seeing what the future of Maui real estate holds, but if there’s one thing I know for sure, it’s that paradise never goes out of style.
Current Market Trends
From April 2013 to March 2014, total international real estate sales increased by an estimated 35% compared to the previous period. National Association of Realtors (NAR) President Steve Brown notes the reason for the increase is largely due to an international interest in “attractive prices, economic stability and an incredible opportunity for investment in their future.”
Also interesting to note, 60% of international home buyers in 2014 purchased real estate with cash, compared to only 33% of domestic home buyers. Since international buyers often don’t have a U.S. credit history or social security number, making it difficult to verify mortgage requirements, cash is the easiest way to handle the buying process.
International Trends in Maui
Buyers from Canada took the top spot in share of international purchases in the U.S. at 19%, but the top dollar share went to China at $22 billion in total property sales with an average of $590,826 per purchase. While Canadians enjoy the perks of buying in an English-speaking country, buyers from China often choose Maui for the relative proximity (5 hours closer than Los Angeles, flight-wise) and great return on their investment if they plan on using it as a part-time residence and renting it out for the remainder of the year.
States like Florida, California, Texas and Arizona took the top spots among international home buyers, but Maui is no exception to the trend. With the rise of many international currencies, proximity to foreign countries and the fact that Hawaii is one of the happiest (and most beautiful, in our opinion) states in the country, it’s no wonder that international home buyers are looking to purchase a piece of paradise to call home. The majority of international real estate buyers in Maui are from Canada or Asia, but there has recently been an increase in the number of European home buyers due to wonderful year-round weather and tropical climate.
Daren Blomquist, Vice President of RealtyTrac, says “The U.S. real estate market is coming off of a rough patch and entering recovery mode, so international buyers see it as a great time to jump in and catch the U.S. market on the upswing.” A huge number of buyers from Asian markets are in the top bracket when it comes to disposable income, making Maui the perfect place to purchase a part-time residence or permanent home for retirement.
With my recent trip to Beijing, Bangkok and Tokyo alongside fellow U.S. delegates, I got the opportunity to learn more about international real estate am excited to announce that FIABCI-USA and the China Institute of Real Estate Appraisers & Agents (CIREA) agreed to form a Permanent Select Committee on doing business between the United States and China. In addition to the announcement that I will soon be opening a RE/MAX office in Chiang Mai, Thailand, I look forward to leaping head first into the world of international real estate.
Tips for International Home Buyers
For international parties looking into buying Maui real estate, we have a few tips to make your search go as smoothly as possible:
- Get a great realtor (like us!) who specialize in representing foreign buyers.
- Consult a tax advisor and local attorney for legal advice in addition to appropriate accounting, bookkeeping and tax preparation documents.
- Since U.S. house sizes are often given in terms of square footage, simply divide the square footage by 10.8 to get the equivalent in square meters.
- To purchase property in Hawaii, buyers need to have closing documents notarized by a U.S. notary – If you’re out of the country, this can typically be done at a U.S. consulate or by a notary or attorney registered with the U.S. consulate.
- As long as you’re in the U.S. legally on any kind of visa, you can buy property on U.S. soil.
- If you’re a foreign resident and fail either the Green Card Test of Substantial Presence/Presence Test, you will be considered, for income tax purposes, a U.S. resident, and therefore essentially taxable for your worldwide income, regardless of what country that income is earned or paid.
2014 Asia Trade Mission Posts
Thus far in 2014, we have traveled from our home in Maui, Hawaii to Asia many times. If you’re interested in our adventures, see the posts below about the people and places we had the pleasure of visiting.