Foreign Investors Swarm The Suburbs

You might have heard that housing prices are hot. And it’s true, the market for single-family homes is the frothiest it’s been in 14 years. The narrative has been straightforward — an exodus from cities and demand for backyard green…

Jennifer
Image Credit: iStock Images, Ivan_Sabo
Sign up for insightful business news.

You might have heard that housing prices are hot. And it’s true, the market for single-family homes is the frothiest it’s been in 14 years.

The narrative has been straightforward — an exodus from cities and demand for backyard green space has caused prices to soar.

While that has played a role, foreign institutional investors are increasingly scooping up single-family homes and driving up prices for hopeful buyers.

Crowded Market

Institutional capital has played a role in the housing market for years. In the wake of the financial crisis, firms like Blackstone scooped up foreclosed homes by the thousands (and made billions as housing prices eventually recovered).

But international investors have largely stuck to commercial properties (like office space or industrial facilities) or multifamily complexes — due to the ease of transacting at scale. That reality is changing:

  • German insurer Allianz announced last month a venture to buy more than $4 billion of U.S. rentals.
  • Singapore’s GIC, one of the largest sovereign wealth funds in the world, is backing a plan by Quinn Residences to buy single-family rental homes throughout the Southeast.

The Industrial Logic: Unlike office leases, home leases often reset every year. In an environment of rising inflation expectations, single-family homes afford more protection and are typically more closely tied to consumer prices than longer-dated leases.

the takeaway

Nothing but frustration for homebuyers.

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

Macy’s Launches Online Marketplace for Third-Party Sellers

Russia Announces Dubious Plans For Aviation Industry Without Boeing and Airbus

Biogen’s Alzheimer’s Drug Success Pops Stocks Across the Industry

Consumer Confidence Rises in Spite of Challenged Conditions

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>