Ramification of Brexit vote that may lead to UK breaking away from European Union in near future will have irrevocable repercussions across the globe. Fear of financial instability, has resulted in numerous contingency measures being taken by governments to soften the impact. Similar measures have been taken by the US government, but Brexit may still have impact on the USA, in particular the real estate market in the USA.
Brexit Leaves Buyers in US Real Estate Market in Tenterhooks
When US real estate market was rocked by 2008 sub-prime crisis and the related financial crisis, big companies like Fannie Mac, Freddy May went bankrupt and AIG was taken over by government. Even as the real estate market was recovering from these setbacks, theBrexit vote is set to push the clock back and force a realignment in various matters including US lending rates. As commercial real estate business in the US grows, property buyers will have to rethink on taking loans from UK banks operating in the USA such as Barclays, HSBC and Royal Bank of Scotland, chiefly on account of variationsin the exchange rate. Anxious buyers will have to do a rethink and may delay their buy plans, in expectation of stable interest rates.
US,European & Other Banks Lending Pattern Post Brexit
Post Brexit non UK banks such as Deutsche Bank, Credit Suisse with expectation ofmore stability in the US commercial real estate market are keen to maintain status quo and recycle money already invested in the US rather than making fresh investment. If UK ratifies Brexit, Germany would become dominant &Deutsche Bank could increase US real estate lending. US banks such as J.P Morgan and Citibank on other hand;currently battling low interest rates in the USA, could take advantage of favourable exchange rate, and makefresh lending investments in Europe. Bank of China on other hand could boost its lending in the US real estate market.
BrexitImpact onthe US Real Estate Market
As mortgage/lending rates are expected to remain low post Brexit in the USA, it could prompt lowincome US buyers to go for loans and buy real estate. Post Brexit, very few UKhomeowners or investorsare expected to buy real estate in the USA. Post Brexit, Real Estate Investment Trust (REIT)that are considered safe, may allow investors a better yield on their investment like the stock market rather than investing money on a property.
As such buyers in the US real estate market need to weigh their options, do thorough research before investing in real estate.
Brexit Leaves Buyers in US Real Estate Market in Tenterhooks
When US real estate market was rocked by 2008 sub-prime crisis and the related financial crisis, big companies like Fannie Mac, Freddy May went bankrupt and AIG was taken over by government. Even as the real estate market was recovering from these setbacks, theBrexit vote is set to push the clock back and force a realignment in various matters including US lending rates. As commercial real estate business in the US grows, property buyers will have to rethink on taking loans from UK banks operating in the USA such as Barclays, HSBC and Royal Bank of Scotland, chiefly on account of variationsin the exchange rate. Anxious buyers will have to do a rethink and may delay their buy plans, in expectation of stable interest rates.
US,European & Other Banks Lending Pattern Post Brexit
Post Brexit non UK banks such as Deutsche Bank, Credit Suisse with expectation ofmore stability in the US commercial real estate market are keen to maintain status quo and recycle money already invested in the US rather than making fresh investment. If UK ratifies Brexit, Germany would become dominant &Deutsche Bank could increase US real estate lending. US banks such as J.P Morgan and Citibank on other hand;currently battling low interest rates in the USA, could take advantage of favourable exchange rate, and makefresh lending investments in Europe. Bank of China on other hand could boost its lending in the US real estate market.
BrexitImpact onthe US Real Estate Market
As mortgage/lending rates are expected to remain low post Brexit in the USA, it could prompt lowincome US buyers to go for loans and buy real estate. Post Brexit, very few UKhomeowners or investorsare expected to buy real estate in the USA. Post Brexit, Real Estate Investment Trust (REIT)that are considered safe, may allow investors a better yield on their investment like the stock market rather than investing money on a property.
As such buyers in the US real estate market need to weigh their options, do thorough research before investing in real estate.
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