Chinese property buyers are flooding the U.S. with cash as they seek investments that are more stable than the volatile stock markets of Shanghai and Hong Kong.
Chinese buyers spent $28.6 billion on American homes in the year ended in March, more than double their purchases two years before, according to the New York Times
, which cites data from the National Association of Realtors. Chinese purchases in overseas commercial real estate jumped 49 percent last year, real estate broker Jones Lang LaSalle estimated.
“The Chinese are deliberate; there will clearly be large capital flows coming to the West,” said Stephen A. Schwarzman, chief executive of the Blackstone Group, the largest private landlord in the United States. “That will increase in frequency until the Chinese government decides it shouldn’t happen anymore — they’ve opened the spigot.”
Chinese purchases make up a tiny slice of overall sales in the U.S. but they have had a disproportionate impact on the market for more expensive properties, buying one in 14 homes sold for more than $1 million, according to the NYT. Buyers from China, including the mainland, Taiwan and Hong Kong, pay $831,800 on average for a home, more than three times as much as Americans spend, NAR data show.
The real estate deals follow a broader exodus of money from China to countries and companies around the world. An estimated $590 billion moved out of China in the 12 months through June, according to Fitch Ratings.
American real estate firms are opening offices in China to tap into the burgeoning market of buyers.
“The market is definitely larger and broader than when we started,” Steven M. Lawson, the chief executive of Windham China, told the newspaper. “They’re very different than the people we were working with in 2007. If we want to cut right to it, they’re less wealthy, a lot younger and a lot better educated from an international point of view.”
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