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Indians join wave of foreign buyers in US housing

NEW YORK — Indians are joining a wave of foreign buyers who see the recovering United States housing market as one of the best places to put their money these days, offering a security blanket from what some consider a bubble in real estate prices in major Indian cities and a sometimes jittery Bombay Stock Exchange.

NEW YORK — Indians are joining a wave of foreign buyers who see the recovering United States housing market as one of the best places to put their money these days, offering a security blanket from what some consider a bubble in real estate prices in major Indian cities and a sometimes jittery Bombay Stock Exchange.

For Indians, who have long put their trust in gold to protect their wealth, US real estate offers a “very, very attractive destination”, said Mr Subir Gokarn, director of research at Brookings India in New Delhi.

Mr Jed Kolko, chief economist at Trulia, an online marketplace for residential real estate, said the most popular property searches for people from India were in and around Silicon Valley, where technology firms recruit heavily from India; in the Boston and Philadelphia areas near universities that have numerous students from India; and in suburban areas of New Jersey and in Queens, where there are established Indian-American communities.

In an echo of the late 1980s, foreign investment in US real estate has taken off again. A recent survey from the National Association of Realtors estimated that from April 2013 to March this year, total sales to international clients amounted to about US$92.2 billion (S$117.3 billion), a 35 per cent surge from the previous 12 months. The figure includes purchases by recent immigrants.

Foreign buyers now make up 7 per cent of total existing-home sales of US$1.2 trillion, according to the survey. Of those, Indians represent 6 per cent of the purchases, spending US$5.8 billion, up from US$3.9 billion over the same period a year ago and on par with buyers from Britain.

Canada still accounts for the largest share of buyers, but China is the fastest-growing source of foreign investors, according to the realtors’ group. And the Chinese buyers are big spenders: Their real estate purchases in the US nearly doubled from last April to last March, increasing to US$22 billion from the previous period. They account for nearly a quarter of all international sales in the current period.

“Most people who can come here, they are pretty wealthy,” said Ms Grace Tian, a broker with Realty Mark Associates in Philadelphia who often works with Chinese clients.

In contrast, buyers from India are a more eclectic group. These include parents living in India who buy apartments for students attending college, making sure the units have concierge service and an extra bedroom so they can visit for extended periods, real estate agents said. After the students leave college, the parents often keep the apartment and rent it out.

The riverfront Newport area of Jersey City has also emerged as popular with Indian buyers.

Ms Irene Barnaby, a broker with Weichert Realtors in Jersey City, said her Indian clients generally spent about US$600,000 to US$800,000 on condos. Some buyers pay cash because traditional banks won’t give them mortgages without a credit history in the US. But she has also created relationships with smaller banks that will lend money to her clientele. “They can get exactly what they want in this area,” she said. THE NEW YORK TIMES

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