Ever since the housing bubble popped in 2007, the U.S. real-estate market has seen very little growth. While this is bad for homeowners who are underwater on their mortgages, the weak housing market has provided serious opportunities for buyers with cash on hand. One group in particular that have been taking advantage of the bottom barrel prices have been wealthy Chinese. CNN explains:
According to a report published by the National Association of Realtors this week, buyers from China and Hong Kong made up the second-largest group of foreign buyers of homes in the US in the 12 months to March — Canadians took first place — accounting for $9bn of sales.
That is a 23 per cent increase on the $7.3bn of sales they notched up in the previous 12 months and an 88 per cent increase from $4.8bn of sales in 2010.
“International Chinese buyers are seen as a very desirable market by real estate agents at the moment,” said Jed Smith, managing director at the NAR. “The strongest growth is coming from China and the rise of Chinese buyers has made up for declines in sales from buyers from the UK and Mexico.”
Pamela Liebman, chief executive of The Corcoran Group, a residential real estate brokerage company, says there has been a “huge” influx of wealthy mainland Chinese shopping for high-end properties in New York since the start of the year.
Reasons for purchases vary, say those who have dealt with overseas Chinese buyers. Some are buying because they want to emigrate or they have children who will go to school in the US.
Others buy because the numbers add up: despite its recent dip, the renminbi is still up more than 4 per cent against the US dollar since the start of 2010 while US house prices are still in recovery mode and appear cheap compared with Australia or Canada.
“When you look at how cheap US real estate is now compared with China, it makes a lot of sense to buy there, especially since you have more rights when you own a property in America,” said a wealthy Chinese investor who has bought several properties in the US but asked not to be named so as not to draw attention to the fact of shifting assets abroad.