North America Investments
The world’s largest economic region with G8 countries USA and Canada, North America offers every conceivable environment, from wilderness to the high rise landscapes of the cities.
Because the region is so diverse, so are the investment opportunities. In the south there are the well known holiday and retirement states such as Florida; there are dozens of well known cities offering every form of city-living and of course there is a wide range of suburban property for the large middle class population.
North American housing market
“Nothing seems to stop the U.S. housing market. House prices continue to rise; demand is strengthening, and residential construction activity is also rising.” So says the Global Property Guide in the 2nd half of 2016.
Many cities are booming and the top housing markets include:
Top performing cities (by house price):
- San Francisco
- Manhattan
- San Jose
- Brooklyn, New York
- Los Angeles
- Vancouver
- Seattle
- Washington
- San Diego
- Boston
Some changes in the list are caused by the fluctuations in the Canadian $ against the US $ but this list represents cities that have continued to see how price growth over an extended period.
With the Federal Reserve raising interest rates at the end of 2016 and most members of the rate setting board predicting further rises in 2017, mortgage rates are likely to rise and hence make it more difficult to afford a new home.
However lending standards are likely to be loosened by the new administration that is keen to drive economic growth. Housing makes up around 15% of the US GDP so is an important sector but one that has been much more cautious after the real-estate bubble.
Medium sized cities are also forecast to play an important role in growth as they are seen as more affordable and attractive to younger buyers.
Why invest in property in North America?
Lifestyles may vary from country to country and state to state but what the whole region has in common is a strong economy and political stability lead by democratic governments.
Currency: US Dollar (USD): 1 GBP = 1.25 USD
Population: 319m
Gross Domestic Product (GDP) of USD: $18.56 trillion as of 2016
GDP rank: 1st (nominally) / 1st (PPP)
GDP per capita: $57,300 (2016, nominal), $57,300 (2016, PPP)
GDP growth rate: 1.9% annual change (2016)
GDP by sector: Agriculture: 1.1%, Industry: 19.4%, Services: 79.5%
Inflation/Consumer Price Index (CPI): 1.3% (September 2016)
Public debt: 73.8% of GDP (2016 est)
Budget deficit: -2.9% of GDP (2016)
Revenues: £3 trillion (2014 outcome)
Expenses: £3.5 trillion (2014 outcome)
Currency: Canadian Dollar (CAD): 1 GBP = 1.67 CAD
Population: 35.2m
Gross Domestic Product (GDP) of CAD: $1.6 trillion as of 2016
GDP rank: 10th (nominally) / 15th (PPP)
GDP per capita: $40,400 (2016, nominal)
GDP growth rate: +0.5% (Q2 2016)
GDP by sector: Agriculture: 2%, manufacturing: 13%, construction: 6%, services: 76%, other: 3% (2016 est)
Inflation/Consumer Price Index (CPI): 1.0% (March 2016)
Public debt: 98.8% of GDP (2016 est)
Budget deficit: $2.9 billion of GDP (2014/15)
Revenues: £683 billion (2012 outcome)
Expenses: £750 billion (2012 outcome)
Opportunity
The USA & Canada remain property investment hotspots. The latest statistics show that up to twenty percent of property sold in the USA is being bought for buy-to-let investments. This reflects something of a change in the attitude of Americans towards home ownership. Driven by tighter lending controls, the current generation are increasingly opting for rental accommodation as buying their own home is difficult.
America is currently the world’s largest market for rented housing. More than 42.4 million households – a third of the population — live in rented accommodation, most commonly owned by landlords and investors who own multiple properties in a single building. With record foreclosures caused by the financial crises of 2008 forcing more people into rental accommodation and the obvious lifestyle benefits available, the North American sector is growing in popularity.
