James Surowiecki has a column in the New Yorker that makes a number of interesting points about our increasingly international real estate market — a trend powered by the super wealthy with real consequences for the rest of us.
For starters, this pattern no longer simply covers rich oligarchs buying second (or third or fourth) homes in Paris or Manhattan. Increasingly, the wealthy in Latin America are buying homes in Miami. Canadians are buying homes in, of all places, Arizona. Seemingly everyone but Londoners are buying homes in London — and then leaving them empty. And the Chinese are flocking to Vancouver (or, at least, their money is). As a surprising result, Surowiecki writes, Canadian officials now believe that “Vancouver’s real-estate market is tightly connected to what happens in the Chinese economy.”
Now, all of this is good for once-flagging housing markets in places like Miami, and for the homeowners who will watch the value of their own properties rise with the influx of foreign investment. The trend also tells us some interesting things about the foreigners who are looking to buy: For many of them, property in Vancouver or Seattle is a safer place to put money than property at home. It’s even possible to envision climate change accelerating this trend, as markets beyond the reach of rising seas become more internationally attractive, too.
But all of this also means that real estate markets are becoming disconnected from the economic reality of people who already live in these cities.
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