Home » Business » Real Estate
Chinese leading foreign buyers of US homes
Print Edition
CHINESE nationals became the largest foreign buyers of homes in the United States last year, a report has claimed.
A huge surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than US$110 billion, according to a study by the Asia Society and Rosen Consulting Group.
The spending helped the US real estate market recover from the crash that began in 2006 and precipitated the 2008 economic crisis, the report said.
Despite a slowdown due to a clampdown on capital outflows, the figure for the second half of this decade is likely to double to US$218 billion, it said.
“What makes China different and noteworthy is the combination of the high volume of investment (and) breadth of its participation across all real estate categories,” including a “somewhat unique entry into residential purchases,” the study said.
The authors said their numbers, based on public and real estate industry data, understate the total. They necessarily miss purchases made by front companies and trusts that don’t identify the sources of the funds.
While big deals, like the Anbang insurance group’s US$2 billion purchase of the Waldorf Astoria hotel in New York last year, and its failed US$14 billion offer for the Starwood group in March, make headlines, the study said Chinese buying of US homes far outpaces its investment in commercial land and buildings.
Between 2010 and 2015, Chinese buyers put more than US$17 billion into US commercial real estate, with half of that spent last year alone.
But during the same period, at least US$93 billion went into US homes, and in the 12 months to March 2015, the latest period for which relatively comprehensive data could be gathered, home purchases totaled US$28.5 billion.
That put the Chinese past Canadians, who have long been the biggest foreign buyers of US residential real estate.
Geographically, Chinese buyers are concentrated in the most expensive markets: New York, Los Angeles, San Francisco and Seattle, but Chicago, Miami and Las Vegas have also drawn buyers.
That focus means they pay well above the average US home price: last year, Chinese buyers paid on average about US$832,000 per home in the US, compared with the average for all foreign purchases of US$499,600.
The motivations are broad: some are buying second homes, some are buying as they move to the US on EB-5 investor visas; some are investing for rental and resale.
Most of the money in US homes, the study said, is private wealth, not corporate.
“This familiarity of utilizing real estate as an investment or wealth preservation tool is more prevalent in China and reflects the broader comfort of purchasing second homes in the United States by Chinese individuals and families,” it said.
Since last year, there has also been the motivation to get money outside China and into dollar assets amid worry about the continued fall in the yuan.
The study said it expects more commercial real estate buys in the US by Chinese firms.
Last month, Chinese conglomerate HNA said it would buy Carlson Hotels, owner of the Radisson brand.
“Anbang is not the only firm looking at assets. Other entities were interested in acquiring Starwood in 2015 before Marriott reached an initial deal, including Jin Jiang Hotel Group, which last year bought a European hotel chain,” it said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
