A recent study outlines the extent to which Chinese investors have been flooding money into the United States real estate market. According to the study a recent surge of Chinese buying of residential and commercial property as brought the five-year total investment to over $110 billion.
Conducted by the Asia Society and Rosen Consulting Group, the study shows that the huge size of the total investment helped the US real estate market recover from the real estate crash that began in 2006. The Chinese investment in real estate has also influenced other countries, inflating prices in developed markets such as Australia and the UK.
The study predicts that, despite the tightening restrictions of capital outflows by Beijing, the amount of investment will double to $218 billion.
“What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all real estate categories,” including a “somewhat unique entry into residential purchases,” the study said.
To fight the soaring real estate prices, the Israel Tax Authority with Gidi Bar Zakay has taken many measures. In December of 2010, the Israeli finance and housing ministers made two new tax amendments. For those purchasing a second or third residential property, the taxes rose from 3.5% to 5% for properties that were up to IS 1 million. The tax went from 5% to 6% for those properties that were between IS1 and up to IS3 million.
However, non-primary residential properties have been taxed at 20% up until now; if sold within four years, they would now be tax exempt. These amendments were planned to be good for two years, and the end of this period is approaching soon. It will be interesting to see how the Israeli finance and housing ministers deal with it now, and how the Israel Tax Authority with Gidi Bar Zakay reacts.
Listen to Jacob Frydman on CNBC’s “Tomorrow in 30” discussing his predictions about investments to watch. Founded by Jacob Frydman and Mr. Eli Verschleiser, United Realty Trust invests in real estate in the New York market and in other east coast markets. Here, he explains that he is watching the home sale index numbers, which were up 5.9% last month. Assuming that they are up again this month, Frydman explained that this could indicate an excellent time to buy. With the repressed market, there are many opportunities to purchase residential property in the New York area and to do so at lower than usual prices.
The area of Los Angeles where UCLA resides, known as Westwood, is the costliest college town in the United States, in terms of the cost of housing according to a recent report.
The average cost of a three- bedroom, two-bath home in Westwood costs $1.27 million. Compare that with the nation’s cheapest college town, Memphis, the home of the University of Memphis, where the average price of a three bedroom home is just under $90,000.
According to the College Home Listing Report, based on a survey of 117 of the 120 “football subdivision schools”, two thirds of the towns in the survey offered homes for under $200,000.
“I love the College Home Listing Report because it highlights the amazing affordability of the college towns that define the fabric of America,” said Coldwell Bank CEO Jim Gillespie.
“Our report underscores the home ownership opportunities in many of these vibrant, affordable communities that are known for their high energy, educational systems and often stable job markets.”
Rightmove is a company that helps people buy or rent real estate or apartments. Rightmove has an internet portal to connect buyers and renters to sellers and home owners. What I like about this company is that it’s a needed business in good times and bad. In good times people look to move to better housing while in bad times people look to economize and therefore move towards cheaper housing. Whatever the economy, Rightmove provides a service and profits.
This company’s financials are good and its stock has continued to perform well. Those of you who follow my column may have noticed that I like to look at management as well as the company’s financials and past performance. I like to see that the management has had several years of business experience preferably working in the same industry or function. To me this means that the management has a deeper insight into how business works and how to deal with opportunities and threats as they arise.
The chairman is Scott Forbes who has 30 years of operations and finance experience and worked with Berkshire Hathaway.
Ed Williams is the Managing Director and has been with the company since the year 2000. Previously, he worked in consulting companies such as JPMorgan.
Nick McKittrick is the COO and Finance Director. He has also been with the company since 2000.
Jonathan Agnew is a Non-executive Director who has been with the company for 5 years after working as an investment banker for over twenty-five years. He served as a Managing Director for Morgan Stanley.
Judy Vezmar, Colin Kemp and Ashley Martin are other Non-executive Directors who add many years of valuable business experience to Rightmove. In short, Rightmove has a very exciting, dynamic and experienced management team. No wonder they’re doing well!