While the global real estate market is in a perpetual state of flux, some trends hold fast – and in recent times one of these has been China buying U.S. real estate.
When it comes to residential property, Chinese buyers make up one of the largest groups of foreign buyers in the United States. According to Statista, historically, between 20,000 and 40,000 residential properties were bought by Chinese nationals each year.
Although Canadian and Mexican buyers purchase more residential properties, the Chinese audience are still the high rollers – spending more than any other group when the value of transactions is considered.
In recent years, Chinese investors have taken the top spot as the most active oversea buyers of US real estate — spending a record $6.1 billion on homes, with purchases focused particularly around Florida and California. Additionally, 60% of Chinese investors settled their purchases in cash.
So, why is China buying U.S. real estate in 2022/23?
The projected increases in social and corporate ties between the two countries in the coming years, coupled with China's significant investments in the U.S. and ample assets in Chinese industries all play their role. With the shifting U.S. political landscape, there’s also the prediction of increased social mobility between the two countries.
All in, U.S. real estate vendors look set to embrace the lucrative opportunity of the bullish'perfect storm' property market.
Why Is China Buying U.S. Real Estate so Quickly?
While many U.S property sales will be approached with their investment potential in mind (the U.S does not impose tax restraints on foreign buyers, which obviously adds to the appeal here) it should also be noted that Increasing Chinese cohesion with American corporate conglomerates is also bolstering Chinese populations in the U.S.
Around half of all properties purchased by Chinese buyers in the US are used as primary residences, with the remainder are vacation homes, second homes or a “pied-a-terre” that will only be occasionally visited.
Even with the disruptive impact of the pandemic on migration, the United States remains the top destination for Chinese immigrants worldwide, and is estimated to account for about 28% of the 8.6 million Chinese living outside China, Hong Kong, or Macau.
In recent decades, many Chinese immigrants arrived either as international college students or high-skilled H-1B temporary workers. Many of these skilled workers remain in the country after qualification, bolstering U.S. industries such as tech and fintech, which display large portions of skilled Chinese nationals.
Shifting Media, Corporate And Investment Landscape
Another factor supporting the appeal of American real estate to the Chinese market are the growing business relationships between the Chinese state and well-known U.S. media corporations. In recent years the Chinese government has invested heavily in American media companies, including major news outlets like the Wall Street Journal and the New York Times, as well as Hollywood studios like AMC Entertainment and Legendary Pictures.
Furthermore, as China looks ever more sure to surpass the U.S in terms of GDP, corporate ties between the two countries are strengthening. China is already the second or third largest market for many American companies, such as Apple, Starbucks and Amway. Mirroring these close ties, Chinese FDI into the US continues to skyrocket.
Inside China's $6.1B Realty Buy-up
Let’s dig a little deeper into the data and statistics that underpin these significant realty
investments. Exactly who is buying, and why? Four key factors show statistical significance.
1. Education
With a soaring affluent and aspirational middle class, 83% of mainland Chinese now say they intend to educate their children overseas.
2. Investment
As already referred to in this article, U.S property represents an appealing investment prospect to Chinese buyers. 61% of affluent Chinese buy international real estate for investment diversification.
3. Own Use
61% of wealthy Chinese buyers purchase real estate abroad to inhabit themselves. Moreover, 37% purchase overseas property as their primary residence.
4. Emigration
Since the end of Covid, 47% of wealthy Chinese citizens plan to move abroad in the next half-decade. When looking at the areas of particular concentration for Chinese buyers, California and New York take the two top spots, followed by Indiana and Florida, tied for third.
China's Social Operating System: Why WeChat Presents a Significant Opportunity for Competitive Edge Via Digital & Personalized Marketing.
80% of China’s high net worth individuals are WeChat users. This popular social media platform is ubiquitous when it comes to daily use in China, and is used so extensively (often in preference to regular websites) that it is touted as China's social operating system.
Investment opportunities, social change, improving global mobility and expanding industries all equate to profitable growth and real estate opportunities for the Chinese market within the U.S. For those looking to profitably position real estate to a Chinese market, WeChat must form a significant element of any productive marketing strategy.
VIVA CITY offers a wealth of WeChat experience and technical expertise that can help U.S. realtors successfully court a Chinese audience, on a platform which they are already active on and familiar with. Sidestepping the cost and complexity of a Chinese website, our powerful Mini Program platform enables you to build fully fledged market and lead generation funnels, capturing interest and sharing information with ease.
Create market leading customer experiences. Control your content and your brand. Accurately measure ROI and gain valuable customer insights. Do it all with WeChat and VIVA CITY.
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