Associated Press --- Washington (AFP) - May 16, 2016
Chinese nationals became the largest foreign buyers of U.S. homes last year as they pour billions into American Real Estate, seeking safe offshore assets, according to a new study.
A huge surge in Chinese buying of both Residential and commercial Real Estate last year took their five-year investment total to more than $110 billion, according to the study from the Asia Society and Rosen Consulting Group.
The sheer size of that total has helped the Real Estate market recover from the crash that began in 2006 and precipitated the 2008 economic crisis, they said. And despite a slowdown due to Beijing's clampdown on capital outflows, the figure for the second half of this decade is likely to double to $218 billion, the study said. "What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all Real Estate categories," including a "somewhat unique entry into residential purchases," the study said.
The authors of the study 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.
Buying Most Expensive Markets:
Between 2010 and 2015, Chinese buyers put more than $17 billion into U.S. commercial Real Estate, with half of that spent last year alone.
But during the same period at least $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 $28.5 billion.
That put the Chinese past Canadians, who have long been the biggest foreign buyers of U.S. residential Real Estate.
That focus means they pay well above the average U.S. home price: last year, Chinese buyers paid on average about $832,000 per home in the United States, compared to the average for all foreign purchases of $499,600.
The motivations are broad: some are buying second homes, some are buying as they move to the United States on EB-5 investor visas; some are investing for rental and resale.
Most of the money in U.S. homes, the study noted, 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," the study noted.
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, which was devalued slightly against the dollar in August
- Australian Securities Exchange
- Banking Industry
- Chicago Board of Trade
- Finance Industry
- FOREX Trading
- Frankfurt Stock Exchange
- High-Frequency Trading
- Hong Kong Stock Exchange
- International Employment
- International Trade
- London Stock Exchange
- Madrid Stock Exchange
- Mergers & Acquisitions
- Money Laundering
- Offshore Tax Havens
- Shanghai Stock Exchange
- Tokyo Stock Exchange
- Toronto Stock Exchange
- World Bank