The Auckland property (read: New Zealand) market has been all but shutting down thanks to lockdown after lockdown. While there are signs of recovery, it might be time for the savvy Kiwi property investor to start looking towards the United States as a uniquely placed option to diversify an existing portfolio or create a new one.
Despite the pandemic, the US property market is sizzling, fastest-growing, and with some thoughtful planning and sound advice, you could be taking advantage of that. So in this post, we’re going to have a look at five key factors that you should bear in mind when thinking about investing in property in America.
At first glance, it may seem strange that there has been a rise in citizens of New Zealand taking up property investment opportunities in the United States, but when one considers that even though the pandemic caused something of a “cooling off” in property in Aotearoa, it’s not uncommon for homes in and around Auckland to fetch upwards of NZ$750k and when you head to the famous North Shore, that could increase exponentially.
So what is it that is driving investors and ordinary buyers alike to head to the United States to start diversifying their investments or just getting onto the property ladder at all? Sure, New Zealand enjoys particularly cordial relationships with the Americans as one of only a handful of countries that enjoy visa-free travel to America; ease of access may have something to do with it.
But cordial diplomacy aside, there are also some very compelling financial reasons for young Kiwis to put down some roots in the free land and the home of the brave.
WHERE IS THIS “SIZZLING” MARKET IN AMERICA?
A more straightforward question to ask would be, where isn’t it? But while we can’t unpack each of the cities that are currently experiencing a stellar boom, we’ve chosen to focus on the top 5.
Note: some publications may tell you otherwise, but we’ve chosen the Global Property guide for this post. Feel free to cross-reference as you wish.
Unless you settle in the higher locations, one of the most beautiful and quirky areas of the United States (also one of the hottest) is seeing a significant boost in the property market and is currently being driven by increased demand and not nearly enough supply. But will it last? Well, all indications at this time seem to agree that there will ultimately come a cooling off, but that’s not going to be for some time, and even then, once the market corrects itself, you’re still going to “pounds in.”
SEATTLE, WASHINGTON STATE
A recent market survey found that Seattle is one of the fastest growing property markets in the United States. Gorgeous surroundings, temperate climate, and its proximity to Canada, all count in the cities favor. Throw in amiable locals, an open, liberal society, and a vibrant arts and culture scene, and you can see why it’s looking good. For the Kiwi investor, there is also a small but active Kiwi community living in Seattle.
Seattle posted stellar growth figures of 6.5% year on year in property returns on investment just in case you needed another reason to consider this fabulous city.
Tampa is a city in Florida that pretty much means you have fantastic weather just about all year round with friendly locals, an international airport, and proximity to all the best of what Florida offers. There is also currently a significant demand in rental properties leading to increased returns on investment for property owners, year on year.
The average house price in Tampa comes in at around $ 280k (US), so way less than what you’d expect in Miami or Orlando, with just as much going for the city.
CHARLOTTE, NORTH CAROLINA
And now for something completely different.
Charlotte is best known as a vibrant and sophisticated business center. Actually, that’s not true – throw in Nascar and The Charlotte Hornets, and that’s more likely to ring a bell. But that doesn’t make the first statement untrue. The city itself benefits from a well-educated population, and Realtor.com lists it as one of the top areas for growth in the United States. It has an awesome climate, outstandingly friendly locals, and if you’re looking for a more “authentic” experience in the United States, you’d be hard-pressed to find a better city to do it in.
Cleveland, Ohio, is the last stop on your brief tour through American real estate (but by no means last on the list), and a big part of the reason for the property boom here is the massive redevelopment projects that are revitalizing the city. This makes Cleveland a fabulous option not just for residential investment but for commercial investment too.
Employment is on the up, spurred on by many new companies setting up shop in Cleveland, and of genuine interest are all the tech companies that are moving here. Easy supply of relatively well-educated labor at a fraction of the cost of other major US cities means that as more young people and families move to the city, the demand for residential and commercial property is only set to rise. Have a read here for some interesting food for thought.
New Zealand has a long-standing and proud relationship with the United States, making travel between the countries very easy. Now that the world is starting to open up again, you may want to start thinking about making your Kiwi dollars work a little harder for you abroad – and why not in America?
This post has focused on residential properties, but you shouldn’t limit your investment goals to just residential. In many cities across the United States, there is a boom in commercial property post covid – but not just any commercial property, instead of shared work-live spaces after the decline in demand for office space, since everyone’s been working at home now.
You’ll be needing some advice for the home sellers guide, so make sure you give that some attention.
For a different take on the world of finance presented in a unique and thought-provoking way, read here.
America has not always been at the forefront of investment destinations for Kiwis and perhaps vice versa. Still, the world is changing, and considering the growth currently being experienced in both countries, maybe it’s high time.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)