Real Estate Brings Chinese Investors to the US
Real estate has always been one of the best forms of investment – land exists no matter what the stock market might do. It’s a permanent form of investment that doesn’t rely on a company’s performance to back its value. Moreover, it’s an investment that can be appreciated by individuals from almost any culture. These are just a couple of the drivers fueling the influx of Chinese investors into the US real estate market.
Unstable Home Market
Chinese real estate investors have many reasons to consider putting their money into US possessions rather than those closer to home. CNBC notes that governmental controls in China are so tight, the future of investments so limited, that sending their money abroad makes much more sense. These investors see the US government as protecting their real estate, whereas the Chinese government is likely to take their properties away.
And while the Chinese people have prospered, growing richer as their national economy outpaces most other countries, China isn’t an ideal place to invest those growing funds. An article in RealtorMag cites a number of reasons for Chinese nationals looking to send their money abroad, including growing pollution, food safety and even the increase in traffic. The government’s stringent control over financial institutions in the real estate investment sector is another huge driver.
The ongoing “anti-corruption” efforts in China are also affecting the decision to send money abroad. Chinese President Xi Jinping is currently embroiled in what CNBC calls, “the most extensive effort to root out ill-gotten gains”, which translates to the government attempting to take control of funds that it may not actually have any right to. That fuels further distrust amongst the Chinese people, giving investors an incentive to protect their wealth by diversifying it on the international market. US real estate is an ideal option here.
An Unprecedented Scale of Investors
Chinese real estate investors have as many different wants and needs in properties as any others, but they’re increasingly finding that the US market meets those requirements. Over $40 billion has been put into US real estate by Chinese investors since 2000, and that trend shows no sign of slowing down.
Where Are They Investing?
While the US as a whole might be drawing in Chinese investors, they’re not investing evenly across all 50 states. There are obvious hotspots, like California and New York, but there are others that might come as something of a surprise. North Carolina and South Carolina are in the top 15 states receiving the highest investment activity from Chinese investors, but Virginia actually outranks all other states in terms of dollar value invested. Seven states have received no interest from investors, though, including Maine, West Virginia, Wyoming and the Dakotas.
In the end, Chinese real estate investors are flocking to American properties, and it is a good thing for both buyers and sellers, with the pace of investment intensifying year after year.