Are Tariff Wars Impacting Chinese Buyers?
According to RIS Media, a major distributor of real estate news, trends, and information on the latest industry technology, China is continuing to be a major player in property acquisition in the United States, despite new regulations and a trade war.
Juwai, the largest Chinese owned international real estate platform, reports that Chinese buyers poured an amazing $39.7 billion into the U.S. real estate market, the bulk being invested in the residential sector ($30.4 billion). The three states that saw the most investment were California, Florida, and New York. Carrie Law, CEO and director of Juwai said, “Mainland Chinese acquired U.S. real estate worth more than in all the countries we tracked in Europe and Asia.”
According to Ms. Law, Chinese buyers are attracted to U.S. real estate because of American educational opportunities, clean air, a diversified culture and economic and employment opportunities. “For a Chinese buyer, purchasing properties in the United States is seldom really about the home itself; it’s about the lifestyle and opportunities they are acquiring by moving there.”
The National Association of Realtors confirms that in 2017, The Chinese invested more than any other nation in U.S. real estate.
Although the growth rate slipped a bit between 2015, and 2017, the growth rate for last year was still an impressive 18.1%. Law explains, the growth rate has decreased because of the “larger starting point which will give you a lower rate of growth.” Additionally, the Chinese government, for their part are trying to put controls in place concerning capital flight, but the numbers are telling us that individual Chinese investors and homebuyers are finding ways around the new rules.
For 2018, Ms. Law states that in August (the latest month for which statistics are available), “Chinese buyer inquiries for U.S residential real estate were at their highest level in the past 12 months.” She estimates that for 2018 Chinese investment will grow by 3-8% year over year.
We can also assume that since China is creating large numbers of newly rich, home purchases in the U.S. should increase in the future. In fact, Wealth-X reports that Asia is producing the highest number of ultrawealthy individuals in the world (those worth $30 million, or more). Last year, the percentage of ultrawealthy Asians jumped by 18.5%.