If you’re planning to sell your property in the USA, you will surely be interested in this new information that we are going to share with you. For several decades, Canadians were the biggest foreign buyers of American properties.
After all, Canada shares a close proximity to the US and millions of Canadians live there. But that may not be the case any longer. It has emerged that Chinese nationals are now the biggest buyers of properties in the U.S.
Well, Chinese nationals are snapping up properties all over the world, not just in the US, but the Chinese foreign direct investment to the U.S. real estate was $22.2 billion in 2015, which is much more than the Chinese investment in properties in any other country. In all, Chinese nationals have investment over $118 billion in overseas properties in 2015.
Interestingly, the Chinese investment in the US was pretty negligible until 2010. 2010 was the year that many Chinese realized that they were seriously rich and could do as they wanted to with their money. Many wealthy Chinese sought to divert their assets from China and look for safe havens abroad.
This began a flow of wealth from China to the hottest overseas property destinations in Europe, North America and Australia. So in 2010, Chinese nationals bought $11.2 billion worth properties in the USA. This has since grown to $28.6 billion a year at an annual rate of 20%. The last six years have seen Chinese invest $93 billion in American homes and apartments.
A report from Asia Society, New York based non-profit states, “Chinese buyers paid substantially more, on average, per home than other international buyers because of their concentration in prime neighbourhoods in California and New York.”
Asia Society adds in its report, “China is a relative newcomer to the U.S. real estate market, joining a long list of global investors that have been active in the market for decades. Each group of investors has been attracted by a similar set of qualities — the growth potential of the economy and the fact the U.S. real estate market is the largest and most transparent in the world.”
The fact that Chinese nationals were able to surpass Canadians as the biggest investors in US properties has certainly fascinated many real estate observers in the USA. Canadians own many vacation properties in the US. Many Canadians spend a part of the year in the US to escape the bitter Canadian winter.
The Asia Society report adds that Chinese investors are no longer just buying residential property in the US. Many are considering other options such as commercial property and rental property. The commercial real estate market in the US has shown considerable improvement over the last few years and has attracted investors from several different countries.
Back in 2010, the Chinese investment in commercial properties in the US was just $587 million. It grew to $8.5 billion in 2015. Today Chinese investors are the third biggest buyers of commercial property in the US after investors from Canada and surprisingly, Singapore.
It’s not just the US housing market that the Chinese are interested in; they have also shown a great deal of interest in Canada. For example, a Chinese real estate company purchased a large commercial 1.5 million sq. foot office complex in Vancouver.
The Asia Society report says that lawmakers in America are yet to grasp the implications of such huge investments from China in both residential and commercial properties in the country.
Asia Society says: “Policymakers, business leaders and the general public in the United States still do not have a comprehensive understanding of the patterns and implications of Chinese investment in the United States.”