Chinese investment in overseas real estate hit record in 2016

According to JLL, Chinese buyers invested a record $33 billion in commercial and residential property last year, a nearly 53% increase from 2015.

The United States was the most popular destination, drawing in $14.3 billion, followed by Hong Kong, Malaysia and Australia. The UK was ranked number fifth. 

JLL believes that it is unlikely that overseas real estate investments in 2017 will be at the same level, due to China's tightening capital controls. The Chinese regulator has restrained the process of capital outflows from China. For example, regulators said they would need to sign off on all foreign acquisitions over $10 billion, and $1 billion if it is outside a buyer's core business. Regulators also said to halt all foreign real estate purchases by state-owned enterprises totaling more than $1 billion. Chinese individual also face more strict controls now when transferring funds overseas.  Though the rules have been in place for a while, market watchers observed that the rules are being more strictly enforced now.  U.S. real estate developers and other market watchers said they've started to see some delays to real estate transactions by Chinese buyers as a result China's clampdown on capital flows.

While there are challenges, JLL believes that Chinese investment will remain a an important player in the global real estate market. Chinese investors have been keen to diversify overseas into other currencies as the renminbi has been depreciating. "We do believe that Chinese investors will continue to be major movers of capital into global real estate for many years to come," said David Green-Morgan, JLL Global Capital Markets Research Director. "But a similar increase in 2017 may be challenging given the recent discussion about China monitoring its capital outflows."

In the U.S., real estate has been among the most popular sectors for investment. Some of the most high profile Chinese investments in the U.S. last year were in real estate. To read the full article in Forbes, click here.