Where Affluent Americans ARE BUYING ABROAD

The wealthiest U.S. citizens are showing significant interest in overseas home purchases. In 2022, more than 64,000 overseas properties were owned by U.S. consumers with $5 million+ in net worth. That’s up 20% from 2021 and a whopping 115% over 2020.

*For individuals with a net worth of $5 million+.

This trend only seems to be growing. Per the 2023 Coldwell Banker Global Luxury survey of international affluent buyers, over 91% of U.S. respondents said they are most likely to own residential real estate outside of their home country. Where might they be making these purchases, though, and what can we expect from U.S. buyers in 2023? Here’s the data.

THE DOLLAR’S POWER DRIVE PURCHASES

Europe and Asia claim all the top international spots for Americans. One big contributing factor is the strength of the U.S. dollar, combined with the simultaneous downtrend of other currencies, like the Great British Pound (GBP) and Yen.

In the former case, the Pound is down 10% compared to the dollar, according to Wealth-X data, giving U.S. buyers a notable bump in buying power in the region. The dollar is also very strong compared to the Euro, which is used in France (No. 5). This is largely due to the economic impact of the war in Ukraine, which has inflation soaring in neighboring countries.

These disparities in currency afford U.S. buyers serious buying power and valuable discounts, which can free up cash for furnishing the properties they purchase or for remodeling, in many cases. They’re also particularly valuable given the state of U.S. home prices, which currently sit near all-time highs.

Incentives Matter

Some of these countries also offer incentives to foreign buyers. In France, for example, Americans can purchase properties using in-country financing.

This is a huge perk considering the ultra-low interest rates the French enjoy these days.17 As of January, typical rates on 15- and 20-year loans in the country were well below 3%. Meanwhile, U.S. mortgage rates are above 6%.

Golden Passport schemes are another incentive that has caught the eyes of HNW individuals. With Switzerland’s scheme, investors need only to pay $250,000 Swiss Francs (about $271,000 USD) to the canton they plan to reside in to get a Visa. 18

A Look Ahead

It’s important to note that these are the places where HNW individuals currently own secondary homes – not necessarily the ones they’re looking to expand into as the year moves on.

See the 2022 The Trend Report for proof. We found emerging markets like Belize, Costa Rica, Honduras, and Panama are gaining ground with affluent buyers. In fact, 23% of those considering a purchase abroad are looking to Central America. Purchases in Mexico, Canada, and other non-U.S. areas of North America came in second, followed by Europe.

The reasons behind this are many, including the value these countries offer compared to U.S. home prices, and the economic uncertainty that exists at home. Some HNW Americans may be looking to branch out to other parts of the world to ensure a more stable and secure longterm investment.

Finally, the affluents’ penchant for exclusivity plays a role as well. With so many large cities growing in popularity, many are looking to invest in more unique spots, where they might enjoy a more private and exclusory experience.