Thanks to property-purchasing limitations and other control measures implemented by their own government in an attempt to stabilize the Chinese housing market and prevent a housing bubble, more and more Chinese investors are putting their money overseas[1]. Fully 30 percent of Chinese home buyers are looking away from their own domestic market, and 10.8 percent of the share in the market of U.S. new homes belongs to Chinese investors. Many are working through real estate agents to purchase international properties at discounts, and some countries like Australia are courting these investors with easy lending practices that only require proof of income.
Steven Lawson, CEO of Michigan’s Windham Realty Group, opened a company headquarters in Shanghai in 2008 in order to help Chinese investors put their money into properties in the U.S. “The U.S. represents a good value for…a rapidly globalizing Chinese investor,” he explained, pointing out that the U.S. housing market’s continued “softness” is often not too big an issue for Chinese investors who not only have the luxury of being able to focus in areas that show promise for appreciation in coming years, but also have “some level of self-use intention, whether it’s a business connections, a children’s education connection, or an immigration intention connection”[2]. Lawson believes that nearly two-thirds of his clients are interested ultimately in education as well as property ownership and investing, making Boston, for example, a “rather natural market” for his firm to target. He does, however, acknowledge that an increasing number of his clients appear to be solely investment-driven and are showing an increased interest in U.S. commercial real estate.
Do you think that foreign involvement in U.S. markets could be a good thing for the housing market and the economy?
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[1] http://news.xinhuanet.com/english2010/video/2011-04/11/c_13823239.htm
[2] http://blogs.forbes.com/russellflannery/2011/04/10/chinese-purchases-of-u-s-real-estate-poised-to-rise/
