The Coronavirus disease is spreading across the world. For China, the epicenter of this virus outbreak, it is a major crisis.
The virus has become a serious challenge everywhere in the world but other than the health risks that the virus is creating, what are the other risks of this virus? More specifically, what is the impact of the virus on the interest of Chinese citizens to buy overseas real estate?
Chinese investors have been investing in overseas real estate for many years. They have purchased residential and commercial real estate in many different countries with the USA being the prime destination of their investment money. Furthermore, surveys indicated that more than one third of Chinese millionaires are considering emigrating overseas with US and Canada being the favourite countries to move to.
And the numbers support these findings. Total Chinese investment in international real estate ballooned US$5 billion in 2010 to US$ 120 billion in 2017. Capital controls put in place by the China government have limited the money outflow in 2018 and 2019. However, these capital control measures could not limit the ever-growing desire of Chinese citizens to own homes in America. Many Chinese strongly believe that USA offers a aetter education for their children, has a healthier environment, and continues to have a booming economy with jobs.
It is important to weight the impact of this contagious Corona virus on the interest of Chinese for US real estate.
Based on a study by the non-profit organization Berkeley Earth in 2015, 1.6 million people in China die each year from heart, lung and stroke problems because of polluted air, underdeveloped health care systems and overall bad environments in China. The fact that the Corona virus is showing again how the health system is struggling to cope with the situation coupled with the fact that the Chinese authorities are potentially not transparent in providing the number of infected people is driving many Chinese citizen to desperation. While the focus of Chinese is simply to remain healthy and avoid any gatherings, many Chinese nationals are now starting to realize that their health care system may not be able to cope with major disasters. Furthermore, it is potentially more difficult to contain viruses in China compared to other countries. This will be likely lead many Chinese citizens to look abroad again for living. As such, by the end of 2020 and into the next year, more Chinese are expected to apply for greencards and will be coming to the US to purchase real estate.
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