Many wealthy Chinese are diversifying out of China and US real estate is a relative bargain for them.
Chinese bought 12 percent of all US homes purchased by foreign citizens last year, up from 5 percent in 2007, according to the National Assn. of Realtors. More than half the home purchases were in California. More than two-thirds of the Chinese buyers paid cash, the trade group said.
This trend is not expected to abate anytime soon. According to the Hurun Report, more than 60 percent of China’s wealthy have left or plan to leave the country, at least part time, and their top destination is the United States.
For the burgeoning middle and upper class Chinese, the US market seems more stable than the Chinese market, where fears of a property bubble have caused a great deal of concern.
“Motivations vary by location. Luxury estates in San Marino are bargains by Chinese standards; inexpensive Inland Empire homes are purchased as investments; top-shelf schools draw throngs to Irvine,” reports The Los Angeles Times.
“The Chinese buying spree sometimes borders on recklessness,” said Dominic Ng, chairman of Pasadena’s East West Bank.
Wealthy Chinese snapped up large homes that are a bargain by China standards, where apartments in China’s metropolitan cities which are a fifth the size can easily go for upwards of $1-million-plus; however, many may not have considered the property taxes (which China doesn’t have) and home maintenance.
image credit: b garret