It’s been a week since most of us returned home from the REALTORS® Conference & Expo, and I think it’s taken this long to catch up! As always, it was an overwhelmingly rewarding week in San Diego. It was great seeing so many old friends, meeting new ones, and learning a LOT about current industry trends. If you missed the conference, see below for a recap of Global Day.
Global Day Highlights
What an exciting week it was in San Diego! International delegates from over 60 countries gathered for Global Day at the 2015 REALTORS® Conference & Expo. Over 400 attendees packed the room, eager to celebrate the achievements of the international community and gain new business-building insights.
Frank Kowalski, CIPS, CRS (FL), Chair, kicked off the day, hosting the 2015 meeting of the Global Business & Alliances Committee. Following a message from the Mayor of San Diego and recognition of numerous guests, the group was treated to three informative global sessions:
Current Events and How They Shape the Global Real Estate Market
Moderator: Mabel Guzman, NAR Liaison to Global Panelists:
João Teodoro da Silva, President, COFECI (Brazil)
Simon Henry, Co-founder and Co-CEO Juwai.com (China)
Yves Boussard, Past President, FNAIM (France)
Nikos Manomenidis, President, CEREAN (Greece)
Maurice Hampton, Managing Broker, Centered International Realty, Chicago (US)
Current events can have a direct impact on real estate markets. What are some of the most important trends cited by panelists?
Brazil: While Brazil is currently experiencing an economic setback, its infrastructure investments for the World Cup and upcoming Olympic games will play an important role in future growth. Large stadiums have been built with flexibility to support other community uses; transportation improvements are benefiting everyone; and facilities in Rio de Janeiro now being used by athletes will later be sold as residential units.
China: The devaluation of the yuan is not expected to have a negative impact on the flow of Chinese overseas investment, but destinations may change. Parents purchasing for future college education, for example, will assess the currency-adjusted cost of real estate as well as the cost of college attendance. Australia and Canada, for example, may be more affordable than the U.S.
Destination marketing is a powerful tool for attracting Chinese investors. For example, within 12 months of establishing direct flights being China and Hawaii, Chinese buyers became the number-two foreign investors in Hawaiian real estate.
France: The Syrian refugee crisis is primarily felt in northern France and along the border with Italy. While it has not yet had a significant impact on France’s real estate markets, it’s a serious and growing problem. Solutions will require collaboration with other countries. To help ease the situation in Calais, the French government is providing winter shelter for roughly 6,000 refugees who are attempting to enter the United Kingdom.
Greece: Greece is also facing a serious refugee situation, on top of financial bankruptcy, but remains open to refugee assistance. Relying on EU financial aid, Greece plans to provide rent assistance, but will not make comps. In addition to helping migrants, this funding is expected to support market growth.
United States: The economic recovery has led to a shift in wealth and a new wealth demographic, driven in part by investors taking advantage of the temporary opportunities created by severely depressed property prices. The upcoming presidential election will likely be the next major event that could affect various policy developments for real estate practitioners.
Technology Tools to Attract and Work with International Luxury Buyers
Moderator: Paul Boomsma, President, Luxury Portfolio International and COO, LeadingRE,
Panelists: Charles L. Black, III, EVP, Marketing & Strategic Development, Hilton & Hyland, Beverly Hills, CA
Sean Britt, Founder, Realtor of Excellence, South America
Karen France, Senior Vice President, REALTORS® Property Resource
Howard Johnson, Broker, JohnsonBenjamin & Assoc. Limited, Jamaica
Eleonore Rojas, VP, NAR Partnerships & International Relations, Realtor.com
Attendees gained insights from several research studies on the luxury market, as well as tips on technology tools to reach and work with these buyers and sellers. Key sources and findings included:
What is luxury? The words are changing, shifting from a sense of “having” to “being.” Today’s luxury buyer wants a luxury “experience,” driven by seven shared passions: Live, Learn, Love, Eat, Work, Host and Play.
What are the top five things affluent global clients want from a real estate agent?
Equip them with knowledge and insight
Be respectful of time, privacy
Be interested/relate to their lifestyle
Be well respected: community and organization
Help make the process enjoyable
Helping luxury buyers “see themselves” in the experience is also essential.
Case in point: A Los Angeles estate had already appeared in Mansion, WSJ, and on television shows, including a breathtaking video shoot. An agent with no affiliation to the property took these pieces to a Chinese buyer he’d never met, communicating exclusively through a messaging service. The buyer’s interest grew to the point that a trip was arranged. The agent also knew this client was a big sports fan and wine enthusiast, so he arranged for the Lakers game to be on during his visit and an impressive wine collection was displayed in the home. When the buyer arrived, the transformation was complete…this was HIS home.
Panelists also shared many excellent sources of data on the luxury market, including:
Annual Survey of Affluence and Wealth (from Luxury Portfolio International at luxuryportfolio.com)
Top U.S. Luxury Markets and Fast-Growing U.S. Luxury Markets (realtor.com Luxury Home Index 2015)
Prime International Residential Index Top 20 Cities (Frank Knight Wealth Report 2015)
Countries with Largest Inflows and Outflows of HNWIs (Fragomen/New World Wealth Survey)
Some of the most helpful technology tips for reaching luxury buyers include:
Realtors® Property Resource (RPR) – Among the top four states for international buyers, numerous MLS’s share active listing data in RPR. You don’t have to be a member of these MLS’s to use this valuable market data for your global clients.
WeChat – Instant messaging is popular all over the world, but if you’re working with a Chinese client, be sure you have a WeChat account, the most popular messaging and calling app in China.
BombBomb – An increasingly popular app that offers free, unlimited SMS messaging to any phone. It also supports text, chatting, calls, and photos/videos.
Global Opportunities: Profile of International Home Buying Activity
Moderator: Frank Kowalski, Chair, Global Business & Alliances Committee
Panelists: Pauline Aunger, 2015 President, CREA (Canada)
Dr. Liao Junping, Director of Real Estate Studies, Sun Yat-sen University (China)
Dr. Ravi Varma, Chairman, NAR-India (India)
Miguel Angel Lemus, Vice President of International Relations, AMPI (Mexico)
Mark Hayward, CEO National Association of Estate Agents (United Kingdom)
Matey Veissi, 2015 President-Elect, Florida Association of REALTORS® (United States)
The dollar volume of U.S. residential sales to foreign buyers was $104 billion in 2014—a new record. In terms of country of origin, for the first time, China replaced Canada as the top source of foreign sales.
According to the data collected, the average home price among Chinese buyers was substantially higher ($831, 800) than all other buyers ($499,600).
Feedback from surveyed agents illustrate that fluctuations in the dollar do have a noticeable impact upon international property demand. For example, buyers from Brazil would have to pay $73,934 more in 2015 versus 2014 to purchase a US$200,000 home in the U.S.
To access the full report, Profile of International Home Buying in the U.S., go to realtor.org/global.
How are global investors finding opportunities in your country?
India – Buyers typically enter the country via contact with real estate brokers and government institutions.
Canada – Most buyers initially tap into the market via Realtor.ca, Canada’s top listing site. In fact, 25 percent of its traffic is from outside Canada.
United States – Most global buyers initially explore U.S. properties online. Given Newscorp’s acquisition of Move (owner of realtor.com®), the dominance of realtor.com®/international for global listings is expected to solidify even further.
United Kingdom – Most buyers first search for U.K. properties via one of three top listing portals.
China – Many real estate agents have withdrawn their listings from Fang, the leading domestic portal, but do display them on their own sites. However, these listings only appear in Chinese.
Other interesting insights:
Every Indian citizen is allowed to spend $250,000 overseas each year. Typically, their first choice is real estate, and their second choice is gold. This is why you’ll see many Indian couples buy homes in the U.S. slightly below the $500,000 price point.
Canadians are still very active buyers of overseas real estate, but their interest in destinations beyond the U.S. is growing.
U.K. residents have reduced their purchases abroad, simply because their own market is appreciating so well. U.K. investors are now allowed to access up to 90 percent of their pension savings to finance domestic buy-to-let purchases.
For those who attended the meetings – what were your takeaways? Did we miss anything? For those who didn’t, let us know what you’d like to learn more about and we’ll consider the topic for next year!
Julie Collins is a marketing and business communications professional who’s spent over 10 years producing content for the National Association of REALTORS® and individual real estate agents, plus three decades in corporate marketing. She is the owner of BlueStem Marketing, a small agency that delivers superior content marketing techniques to real estate firms and helps individual agents succeed as niche specialists.