Speculation grows that Chinese buyers are losing interest in Australia following the country’s tighter lending from banks after Chinese investment in the USA market has surpassed $300 billion, and continues to increase despite China’s economic weakness and increased legislative controls, according to a report from Rosen Consulting Group – a leading USA real estate consulting, research and analysis firm – in partnership with the Asia Society.
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Chinese real estate investors acquired at least $17.1 billion of existing commercial property between 2010 and 2015, representing an annual growth rate of 70%, according to the report.
A new report shows more and more Chinese property buyers invest their money into the USA property market.
That focus means they pay well above the average U.S. home price: past year, Chinese buyers paid on average well over $1 million per home in the United States, compared to the average for all foreign purchases of $686,600.
“Like US Treasuries, these bonds are important investments for Chinese government finances, because they allow for recirculation of dollars gained by the trade imbalance, and for the US housing market, because they help ensure liquidity and mortgage rate stability”, according to the report.
But during the same period, at least US$93 billion went into U.S. 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. Chinese nationals are the largest foreign group of homebuyers in the United States, spending at least $93 billion on residential property between 2010 and 2015.
Chinese purchases amass in expensive markets, such as New York, Los Angeles, San Francisco, Seattle and others, the study says.
CHINESE nationals became the largest foreign buyers of homes in the United States previous year, a report has claimed. “But that’s really a small piece of the potential investor universe”.
China’s slowing economy, turbulent stock market, and real estate bubble have all played a part to drive Chinese investment overseas, according to the report.
The report says Chinese direct investment was negligible in the US until 2010 but has then grown dramatically.
Breaking Ground is the fourth report in a series dating back to 2011 that looks at the broader phenomenon of Chinese investment in the U.S. The past reports, produced as a partnership between Asia Society and Rhodium Group, have looked at foreign direct investments from China at the national level and in California, and at investments in the high tech sector.
The report glosses over concerns that Chinese buyers may raise prices to levels unaffordable for locals and cause a housing bubble-which are now becoming major issues in other places popular with Chinese homebuyers, such as Canada and Australia.
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“Policymakers, business leaders and the general public in the United States still do not have a comprehensive understanding of the patterns and implications of Chinese investment in the United States”, the USA report said.
