Chinese buyers are flooding into the American property market as it continues to show signs that it has bottomed. According to the latest data Chinese nationals are now the second biggest foreign buyers in America after Canadians, having bought $7.4 billion worth of property in the year ending March 2011 (this is when the latest NAR report covers up to), which is a 24% increase on the previous 12 months.
Meanwhile, according to Real Capital Analytics, Chinese and Hong Kong buyers invested 1.71 billion in US commercial property in 2011, which is almost 4 times as much as they spent in 2008.
Fuelling the demand is an 8% growth in the value of the Yuan compared with the US dollar since mid-2010, which coupled with the continued decline in prices and flood of repossessions gives Chinese buyers a significant increase in buying power. Meanwhile the recent weight of evidence to suggest the American property market is finally bottoming, including several consecutive months of rising existing home sales, is likely acting as a catalyst for increasing foreign sales.
The Chinese market is also currently enduring a government imposed slowdown, after severe restrictions on lending, second home purchases and additional property taxes in Shanghai and Chongqing led to falling demand and prices across the country. This is also likely a contributory factor in increasing numbers of Chinese buyers buying foreign property.
Whatever the reason there is little doubt that more Chinese buyers are pouring into the US, with many agents reporting a surge in Chinese demand in cities like New York, Los Angeles and San Francisco, as well as the cities in Florida and Nevada with high concentrations of distressed and foreclosed properties for sale.
- Thursday 05 April 2012