CBRE forecast: Chinese to buy more and more US real estate

2013-02-18
New York

Based on a report published by CB Richard Ellis, a large global real estate firm, rich Chinese will spend billions on US real estate over the coming years. It is clear that the United States is the country of choice for China buyers. Canada and Australia come in at No. 2 and No. 3 respectively.

News of Chinese real estate deals in the USA are showing up in the media on an almost daily basis. Similar things happened with the Japanese back in the 1980s. Most experts believe that Chinese are buying up high end real estate in Los Angeles, San Francisco and New York, in particular. In California, based on data from NAR, China is the third largest foreign buyer of real estate.  .

Across the 50 states, the Chinese buy more U.S. real estate than Indians, Mexicans or the British. While Mexicans are a major buyer in California and across the south, China still ranks within the top five foreign nationalities buying real estate in 44 states. China, for instance, is ahead of Mexican buyers throughout the more costly Northeast. They already are the number one foreign buyer group in states like West Virginia and Massachusetts. They are number two buyer group in New York, Maine, Indiana, Missouri, Colorado, Wyoming and Hawaii.

There are several reasons why Chinese are so interested in US real estate. First, Chinese investors believe it is the right time to buy American real estate following a major recession a few years ago.  Furthermore, Chinese are increasingly looking outside their home country to make investments; China is facing uncertainty and most educated and wealthy Chinese are eager to move their assets outside of their country.

Chinese are interested in both residential and commercial property. For example, Chinese commercial real estate purchases in the U.S. totaled over $3 billion in 2012, most of it in California. The development companies China Vanke and Tishman Speyer signed a deal for a $620 million luxury condo project in San Francisco and another $1.5 billion deal occurred between Zarsion and Signature Development Group.

If CBRE China’s report is correct, Chinese real estate buyers might be spending up to $178 billion on properties overseas.

 

Source: Forbes, July 2013

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