Chinese buyers out in force during this Chinese New Year Holiday

Happy Chinese New Year! Chinese are having one long week of holiday at the moment and Chinese buyers have been reported everywhere in the US looking for that house that they always dreamed about.

Chinese New Year

Monday February 8 is the official Chinese New Year’s day this year but the festivities go on for an entire week. Most Chinese citizens are taking 10 days, or 2 weeks of vacation.  Offices all over China are closed for this holiday and manufacturing plants shut down as well.  More than 1 billion Chinese are traveling home to see their family and traffic jams are reported everywhere. 

Chinese buyers visiting the US during the Chinese New Year holidays

For American real estate agents, it is the busiest time of the year. One of our member Agents in Seattle has three families visiting in a matter of 5 days this week to view her listings and she is booked back-to-back with appointments to meet with these Chinese buyers in downtown Seattle and Bellevue.

Agents in San Francisco and New York are reporting the same level of activity with families looking to buy a house for a child who got accepted in Stanford University, New York University and Columbia University. Our member Agents in Boston are seeing several families exploring the areas around Boston University and Boston College this week.

There are house viewings but will the Chinese buyers make offers?

Many Chinese buyers are actively viewing houses this week but will they make offers? And what is the situation with the money transfers out of China in order to make the deposit?  The volatility of the China stock market over the last month has caused the Chinese government to clamp down on money transfer from individual Chinese citizens. As always, there has been a strict limit of 50,000 USD per year that a Chinese citizen can transfer out of China.  Now however, it seems that banks are much more strict on actually enforcing this.  As such, there is a wide range of stories of Chinese buyers struggling to transfer the money out of the country to make their deposit for the purchase of a house in the US.  It seems that especially the luxury Chinese buyers (defined as buying a house or condo apartment with sales price of more than 5 million USD) are not present at the moment. Some speculate that these ultra-wealthy Chinese buyers have been affected the most by the controls that are put in place, as well as the anti-corruption campaigns running.

However, some Chinese buyers have proactively addressed the money transfer challenge over the last few weeks and are still in a position to make offers for houses.  Also, many of these Chinese buyers have offshore bank accounts (for example in Hong Kong and Singapore) that they have been using for years. As such, they are not affected with the increased level of controls that was put in place on capital outflows.

While American real estate agents are eager to close deals on a house with these Chinese buyers during this Chinese New Year holiday period, it remains to be seen whether the Chinese buyers will prefer to go shopping on Fifth Avenue or in Chinatown instead of buying a house or an apartment.