Investors in China are increasingly investing in properties overseas, viewing real estate as a relatively safe investment vehicle for their renminbi. They are the #1 foreign investors in both the United States and Australia, and are pouring investments in many of the wealthiest countries around the globe. Some reasons behind this growth in real estate investments include current volatility in the Chinese domestic stock market, the growing divergence between China’s renminbi and international currencies, increasing appetite for portfolio diversification, the Chinese government’s recent approval of the Qualified Domestic Individual Investor Program (QDII2), and a desire to buy homes for their children who are studying abroad.
I. Where Are Chinese Investors Buying Real Estate?
Ranked by Country
The below list is from a 2014 interview with Juwai’s CEO, an online marketplace that connects Chinese real estate buyers with overseas real estate agents & brokers that’s been operating since 2010, on a Forbes article in which he shared the top 10 countries where Chinese buyers are purchasing properties.
- U.S.A.
- Australia
- Canada
- United Kingdom
- New Zealand
- Thailand
- Singapore
- Portugal
- Spain
- Malaysia
Ranked by Top U.S. States and Cities
The National Association of Realtors survey from 2015 shows that the top trending cities for Chinese real estate buyers are:
- Los Angeles (California)
- San Francisco (California)
- Seattle (Washington)
- New York (New York)
- Houston (Texas)
The graph below also highlights the top U.S. states that are preferred by Chinese home buyers, which include:
- California
- Washington
- New York
- Massachusetts
- Illinois
- Texas
- Florida
- Hawaii
- New Jersey
- And other states
II. How Much are Chinese Investors Spending On U.S. Real Estate?
U.S. Residential Real Estate
A report from the National Association of Realtors from June 2015 shows that Chinese real estate buyers are the #1 purchasers when it comes to buying U.S. residential real estate – beating out Canada, India, Mexico, and the United Kingdom. In 2015, Chinese real estate buyers purchased nearly $28.6 billion in residential real estate properties in the United States. The 2nd largest international buyer of U.S. residential real estate was Canada, coming in at $11.2 billion in 2015. The below graph from the National Association of Realtors shows an increase in spending on U.S. residential homes over the past few years.
While the average U.S. home sold for $255,600, Chinese real estate buyers of American homes purchases homes at an average price of $831,800. Additionally, 69% of home sales purchased by Chinese buyers were entirely in cash. In 2015, it’s been estimated that Chinese investors spent $8.6 billion on U.S. commercial real estate alone.
These investment numbers do not include the billions of dollars that Chinese investors have in U.S. real estate bonds. Chinese investors who are looking to diversify their portfolios should also consider these alternative ways to invest in real estate without having to purchase property. Real estate developers should not overlook the purchasing power of Chinese investors when it comes to both retail and commercial real estate.
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