Middle East investors are turning to USA real estate more and more, from a combination of attractive prices, accommodating banks and political turmoil abroad.
The United States has long been a favorite real estate investment spot for Middle Easterners, especially those in the oil rich Persian Gulf states. Wealthy families buy vacation houses and homes for their college-age kids in such places as Florida, California and Washington, DC. With so many distressed properties on the market in the US, Gulf states residents are snapping up good USA real estate investments.
Of course, the weak U.S. dollar combined with signs of economic recovery are also factors. Isam Salah, a Middle East and Islamic Finance expert, says: “Gulf investors are returning to the US and the past six months has seen an increasingly strong pace of investment, particularly in real estate.”
Qatar, for example, is growing its economy like gangbusters as part of its ambitious 2030 Economic Vision growth plan. It plans to boost investments overseas to as much as $35 billion this year from more than $20 billion last year as the Gulf country eyes deals in US real estate, Prime Minister Sheikh Hamad Bin Jasim Bin Jaber al Thani said.
“We are looking for properties, commercial properties in the U.S., because it’s the “right moment” to do that, Al Thani recently told CNBC. “We are checking and discussing some deals in the U.S.”
US Real Estate is an Islamic Friendly Investment
While a large number of Middle Eastern investors use conventional banks, there is a strong push in that region toward Islamic banking, also known as Sharia complaint banking. This system prohibits charging interest. Instead, the bank buys the investment outright and sells it to the investor at a profit that is amortized over a fixed period of time.
More US banks are willing to accommodate Islamic investors. Lenders working within the real estate market are already used to including Sharia addenda in documents drawn up for major real estate deals with Middle Eastern investors.
As a result, Islamic funds are keen to return to the markets, particularly because it has been more difficult for them to find alternative investments that are Sharia-friendly.
Middle East Investors Know Real Estate
Real estate investing is a deeply entrenched tradition for Middle East investor because property is a tangible asset (Sharia friendly) and the real estate market in the Middle East continues at a robust pace. Islamic investors are well versed in analyzing such assets and projects. They are taking that experience abroad to the US. Like the many new investors from the UK, Europe and Canada, they are realizing their own version of the American dream!
For more information about investing in USA real estate, or capitalizing on the foreign investment trend, contact us today!