Chinese Property Buyers Look Abroad
Chinese interest in U.S. real estate began climbing during the U.S. housing meltdown, when plunging property prices made the U.S. a magnet for global buyers. Today, interest is growing as a rising yuan — up more than 8% since mid-2010 — gives the Chinese greater purchasing power, and the mainland’s restrictions on property purchases encourages them to look overseas. With U.S. single-family home prices a third lower since 2006, the U.S. also compares favorably with other top markets for Chinese investment, such as the United Kingdom, Australia and Canada.
“For China, the world is an emerging opportunity,” says Andrew Taylor, founder of Juwai.com, a real estate site based in Hong Kong that was launched in 2011 to match Chinese buyers with U.S. real estate. “We’re talking about a huge chunk of people with cash and the desire” to invest overseas ….
Roughly 40% of Chinese buyers want property in the U.S. as investments, while 60% are buying in anticipation of their children going to school here, or for business or immigration purposes, says Steven Lawson, chief executive of Windham China, a firm that helps match Chinese buyers with U.S. sellers.
America is far from the only destination: The Globe and Mail recently reported that mainland Chinese now comprise more than 20% of foreign new home buyers in London, Singapore, Toronto and Vancouver. In the latter case, the influx has received a likely disproportionate share of the blame for soaring property prices, whose scale is illustrated by The Thirties Grind’s comparison of $2.1 million homes in Toronto, Los Angeles, Melbourne and Vancouver’s Kerrisdale. The Vancouver Sun’s Pete McMartin discussed the issue on Tuesday amid new talk of restrictions on offshore buyers:
To judge by the increasing number of media stories, and the apocryphal tales of wealthy Chinese offering cash by the shovelful, and the unbridled (and usually vitriolic) comments about such buyers on web pages and in newspapers’ public comment sections, many believe that nouveau riche Chinese nationals are the main reason for the price increases ….
In conflating the high cost of housing in Metro with the arrival of wealthy Chinese buyers, and in doing so without any statistical evidence, there is a real danger of the issue becoming racialized.