If you’ve an overseas property for sale, there’s good news for you – the Chinese stock market crashed by 20% over the last month or so! Now, how is that good news?
Well, it means that most Chinese investors have withdrawn a lot of money from stocks and are today sitting on a huge amount of cash. So, this cash needs to be invested, and here’s what they are doing – buying overseas property all over the world, in the United States, Singapore, UK, Spain, Portugal, Australia, Thailand etc.
Sydney agent Michael Pallier spoke about the increase in demand from Chinese investors for overseas property following the stock market crash: “A lot of high-net-worth individuals had already taken money out of the stock market because it was getting just too hot. There’s a huge amount of cash sitting in China and I think you’ll find a lot of that comes to the Australian property market.”
Real estate agents across Europe, Australia and North America are bracing for an avalanche of interest from Chinese property investors. All wealthy Chinese want a safe haven for their money, a place to divert their substantial savings. They have already withdrawn over $60 billion from the Chinese stock market over the last 5 months, and most of this money is likely to be invested in overseas property.
Tom Bill, who is an analyst at Knight Frank says, “There is anecdotal evidence that Chinese buyers have intensified their interest in safe-haven global property markets, including London, as a result of the recent stock market volatility.”
Ed Mead, executive director of the London based realtor Douglas & Gordon, said Chinese investors were looking to buy whole blocks of flats, so high is the interest from China: “It is unusual to see the Chinese block buying, it implies that this is a capital movement rather than just individuals looking to park money.”
The rich in China have always sought a second citizenship and have wanted to settle down in an overseas country. Over 91,000 high net worth Chinese have settled down in Europe over the last 10 years, and more are expected to follow, attracted by the Golden Visa schemes offered by countries such as Spain and Portugal that offer residency permits and traveling permits under the Schengen Agreement to non-EU investors making substantial property investments in these countries.
No wonder there is a rush from Chinese investors with net assets of $1 million or more to move to Europe. Other popular destinations are Singapore, US, Canada, Australia, New Zealand and Hong Kong. Indeed, already Chinese investors have bought $5 billion worth real estate in the United States in the first six months of 2015.
Andrew Taylor, the founder of Juwai.com, a real estate website that caters specifically to Chinese buyers said that his site had received an unprecedented amount of online traffic and phone calls which proved that the appetite for overseas properties had only increased: "We believe overseas property transactions will climb to $220 billion by 2020 from $52 billion last year. The era for overseas investment has just begun."
Sandra Li, who works for Aoye Immigration Service, which helps high net worth Chinese investors get citizenship and residency rights in Australia said the Chinese demand for Australian property had increased over the last couple of months, following the downturn in China: "The downturn in China's domestic property market actually drove many Chinese developers to rush to Australia to grab land. What inspired me is the rising prices have drawn more investors from Germany and South Africa, so they wouldn't put all the attention on Chinese."