As the U.S. starts to see slow gains in the housing market, the low price of houses has opened a floodgate for international buyers, especially those from China. China’s economy is currently thriving, allowing many with extra money to spare to make a move on U.S. property. The median home price for Chinese buyers is double of American buyers ($199,500). This is coupled with the fact that a majority of Chinese buyers pay out in cash so they are a broker’s dream. Here’s a quick look at where Chinese home buyers are gathering property and how.
Top 2: New York City and Los Angeles
It is no surprise that these two cities top the list. Both have strong and established Chinese communities. When searching for homes abroad, most tend to want to live around a familiar culture. In a lot of European cities there are sections dedicated to ex-pats. America does not have a cut and dry “ex-pat country” area but, because it is one of the most diverse countries in the world, it isn’t hard for Chinese home buyers to find large Chinese populations. Although pricing for homes in New York City and Los Angeles are some of the highest in the nations, some Chinese investors have chosen not to reside there permanently. Instead, they have chosen to buy property for the sake of having a place to stay when visiting children in college or to rent out. Both cities are great for tourism and can offer a lot of income by way of rent. It is also no coincidence that a major city in the east and a majority in the west are drawing international eyes. Both cities are projected to continually expand in the near future. Large homes in Los Angeles and luxury lofts in Manhattan offer a wide variety of comfort for wealthy home buyers.
Some may be surprised by Detroit’s placement on the list. Chinese homebuyers are preparing for Detroit’s imminent comeback. Although, Detroit’s economy isn’t as strong as Chicago, Atlanta, or Houston (three other cities that made the list) with investments ranging from corporations to individuals pouring into the city, a bounce-back could happen in as little as 10 years.
According to CNN Money, Chinese buyers have bought foreclosed homes for as low as $25,000 around the downtown area and are just sitting on the proprieties. Currently, investment in Detroit is a waiting game. Those who understand the potential that lay in getting in on the ground floor of a revitalizing city also know there are certain risks involved. If investors pour money into their properties before the resurgence happens then they lose more money through flipping the house and sitting on it than just waiting.
How do Chinese home buyers find properties?
A very popular website called Juwai aids Chinese buyers in the search for international property and is the largest sit of it’s kind. The website features residential and commercial property listings for over 52 countries. The website also provides insight on buying trends, market analysis, and country buying guides. Juawai also lists stats on Chinese buyers. For instance, less than 1 percent of people from mainland China can read English.
Language doesn’t seem to be a barrier in closing deals, considering that the Chinese purchased $8.2 billion worth of U.S property in 2012. Juawai also offers some insight into why wealthy Chinese are investing elsewhere. According to their “Chinese property buyer facts,” 85 percent of wealthy Chinese want their kids educated overseas. If you can afford to send your child to college in America, the chances are you can also offered a home to stay in when you visit.
Sixty-three million Chinese have the appropriate wealth to make overseas investment. This will be an interesting trend to watch as America’s economy builds.
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