however, particularly in the U.S., is to look at policies
and regulations that spur supply, Yun says. The lack of
new-home construction is a far bigger factor in affordability, and foreign buyers aren’t having much influence
on increasing construction — nor would increasing
taxes on foreign buyers, he adds.
“For some cities, the proportion of foreign buyers
can grow large enough to push up prices faster than
local incomes rise due to supply constraints,” says Texas
economist M. Ray Perryman of The Perryman Group.
“In areas where the barriers to new-home construction
are low, such as most of Texas, Florida and Arizona, the
market response is to build more homes, which limits
the amount of price increases over time.
“Where land is scarce, regulations are intense and
construction costs are high, as is the case in New Jersey
and much of California, the capacity to build is con-The Trump administration’s negative rhetoric and
policy proposals related to foreigners and immigrants
has had some minor effect on demand by foreign
homebuyers, as measured by NAR’s survey results,
which show foreign homebuying dipped slightly postelection, Yun says. Still, homebuyers ultimately act on
economic interest, he stresses.