Chinese investment in US residential real estate has increased more than 150% in less than 5 years. In 2010, Chinese nationals invested $11.2B in US home properties; in 2015, those dollars increased to $28.6B.
The major reasons for this increase are twofold: one, the Chinese government loosened capital restrictions on its people and two, China’s economy, and therefore its wealth producing power, is booming.
How and for how long these two effects will last is anyone’s guess in light of current economic-political negotiations regarding trade between these two countries but for the moment, there are specific things about US residential real estate that attract Chinese real estate investors.
What do Chinese investors prefer in US residential real estate?
- Proximity to top ranked high schools and universities. Education is highly valued by the Chinese. Chinese families want their children to be educated by America’s best. Those children need places to live while being educated at the finest high schools and universities in this country.
- Financial security – Chinese nationals invest in real estate for their present and future generations of children. They seek out financially viable opportunities.
- Cachet – Residential real estate that conveys wealth through well-known locations is important to Chinese nationals. They like their peers and “outsiders” as well to know they have purchased a home in a sought after zip code and neighborhood.
- Yield – A residential property with the potential of a high rental income is highly valued.
- Value – A US home price that compares favorably with Chinese real estate prices is most attractive.
- Visas – Regulations that benefit Chinese tourists, investors, immigrants, students, etc. are highly valued.
- Air connections – Easy, direct flight access back and forth to China is a must.
- Feng Shui – Chinese nationals seek out properties that abide by feng shui rules of simplicity, balance, light.
- Numerology – Chinese nationals have a propensity for the numbers 6, 8 and 9. Any thing about a home that includes those numbers (addresses, zip codes, square footage, number of rooms, whatever) has a leg up on homes that do not.
Additionally, Chinese nationals prefer properties with ultra-luxury prices, homes that are move-in ready and furnished, and homes that are branded with well known entities such as the Four Seasons or the Ritz Carlton. Chinese investors love homes filled with amenities they can’t easily get at home in China…amenities such as swimming pools, sports or gym facilities, gardens, indoor garages, storage facilities.
The smaller the world becomes through the magic of technology, the more Chinese nationals and other foreign investors will seek out real estate opportunities in the US. Be ready and be proactive, agents.