Chinese Investment in US Real Estate Tops $300-B

Chinese Investment in US Real Estate Tops $300-B

Chinese Investment in US Real Estate Tops $300-B

Chinese investment in the US real estate market has surpassed $300-B and is growing despite China’s economic weakness and increased currency controls, the authors of a new report said Monday.

Between Y’s 2010 and 2015 Chinese buyers bought $93-B in residential real estate, nearly $208-B of mortgage-backed securities, and roughly $17-B of commercial real estate, including office towers and hotels, according to the Asia Society’s report.

Despite those numbers, FDI (foreign direct investment) from China still only makes up 10% of all FDI put into the United States.

However, the report is significant as the 1st independent study to prove Chinese investors rank among the top in every real estate sector. It also shows Chinese investors have stamina and can withstand short-term market events.

“There are strong signals that there will be continued, maybe even increasing appetite,” said and expert during an event at New York’s Asia Society.

How long the good times will last depends on both the US and Chinese economies.

Analysts’ project the United States will move out of its economic recovery and into a minor slowdown within 18 to 24 months, during which time China’s slowdown may worsen.

China’s President Xi Jinping said Monday that he will push supply-side reforms and focus on increasing the middle-class, underscoring the pressure the country faces to reverse growth rates that are the lowest in 25 years.

Interest from some Chinese home buyers may fade, but overall they tend to have bigger budgets for home purchases than other international buyers, the report found.

The average home price for Chinese buyers in Y 2015 was $831,800, compared with $499,600 for all other international buyers. In terms of the total dollar amount spent on US homes, China surpassed every other country from Y 2013 to Y 2015, the report found.

In Y  2015, Chinese investors for the 1st time bought more homes than buyers from Canada, formerly the leading purchasers of US homes, according to the report.

One reason Chinese buyers spend more, the report found, is their tendency to buy in expensive property markets. In Y 2015, 35% of Chinese house purchases were in California, followed by 8% in Washington, and 7% in New York.

Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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