The Largest U.S. Real Estate Show And Investment Forum Is Coming To Shanghai
American developers and brokers head to China to snag investors at the source
The Chinese love real estate like Trump loves Twitter. Since investment restrictions have increased domestically and loosened internationally, Chinese investors have continued sign sales agreements for US real estate like disillusioned democrats have signed Canadian immigration forms. While populations in the UK and US voted for policies that would severely restrict the flow of foreigners into their lands, their governments have markedly different positions when it comes to taking foreign money. In fact, judging on the western real estate firms heading to mainland China to encourage Chinese investors to park their cash overseas, the gates are open and the welcome is warm.
China is so big,” Victor Li, a director of international project marketing for the US real estate giant CBRE, told the Guardian. “I think it is just beginning, you do the figures: China has a population of 1.4 billion. If you target only 1% of China’s population, that’s 14 million people – so it’s already almost two Londons.”
“Our thesis – and this is supported by quite a lot of evidence – is that in many ways the international Chinese investment journey is probably just starting,” says Charles Pittar, chief executive of Juwai.com, a website that aims to pair mainland buyers with property developers in places such as Australia, the US and the UK. Pittar’s company, lists 2.5 million properties and calls itself China’s largest international real-estate website.“I guess the key is: what is it going to become?” Pittar says. “Our view is that … it could be growing to somewhere around $200bn [annually] over the next 10 years.”
He adds: “It’s a big market now, but it is likely to be anywhere from two to four times the size in 10 years’ time. The exciting thing about China is that there are 168 cities with more than a million people. So this is just such a huge market.”
American trade publication The Real Deal is hosting what it terms as “The largest U.S. real estate showcase and investment forum ever held in China.” Their ad for the Shanghai conference, to take place from November 17th-19th, cites some impressive figures:
- $218 billion invested in existing US real estate from 2016-2020, not including new developments.
- 69 percent year-over-year increase in Chinese investment in U.S. real estate, totaling $37.1 billion.
- 71 percent of Chinese buyers, on average, purchased homes in the US on an all-cash basis between 2013 and 2015.
- 87 percent of all EB-5 visas were issued to Chinese nationals.
- 64 percent of wealthy Chinese are already engaged in overseas investment.
- 33 percent of all international students at U.S. universities are Chinese.
- 30 percent of the world’s luxury products are consumed by Chinese.
Juwai.com touts its mainland China office as a unique portal for communicating directly with buyers where e-mail communication channels through Gmail, Google, Facebook and Twitter are forbidden. Such seminars allow face to face interaction for the US real estate industry with Chinese investors. Needless to say, it’s an event for high rollers. If you’re looking for a Chinese buyer to purchase your Newark, NJ duplex, this may not be the place for you. A platinum sponsorship, which includes a 10 x 25’ booth at the conference will set you back the not insubstantial sum of $100,000.
There has been a surprising addition in one of the top US cities, Chinese investors are flocking to. Seattle saw more inquiries from mainland-Chinese homebuyers than any other American city in four of the last seven months, according to juwai.com, as reported in the Seattle Times. The frenzy increased after nearby Vancouver imposed a 15 percent tax on foreign investors in order to cool its overheated market.
“When they look at Seattle, they think wow, everything seems like a screaming deal,” said Mei Yang, a broker who specializes in Chinese clients for Realogics Sotheby’s International Realty.”
Overall, buyers from China bought about $1.6 billion in homes across Washington last year, according to the National Association of Realtors. The state drew 6 percent of the $27 billion that Chinese spent buying U.S. homes last year, putting Washington behind only California, New York and Texas.
Still, the Seattle region is nowhere near catching up to the land rush experienced in British Columbia, which had about $760 million worth of home sales to Chinese buyers just in a one-month stretch earlier this year, according to news reports.
Chinese money now accounts for about 55 percent of all homes purchased by foreigners in Washington, the Realtors association says.
And it’s not about to end anytime soon.
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