Any discussion of working with the Chinese market must begin with a word of caution: China is in many ways as diverse as Europe, so general statements about Chinese clients must be treated carefully.
In the past 30 years, our firm has done thousands of transactions, both commercial and residential, with Chinese families and businesspeople. Notwithstanding China’s immense diversity, our collective experience has given us certain concrete insights into the expectations of Chinese clients, what factors shape their investment decisions, and how to best service this segment of the market.
When compared to other investment vehicles, there is a general preference for real estate investment amongst Chinese clients. According the U.S. Census Bureau and other studies, Asian Americans, specifically Chinese Americans, have a higher homeownership rate than any other immigrant group.
There are a variety of reasons for this which are beyond the scope of this article, but the bottom line is that when Chinese families or businesspeople come to North America, real estate is often the first major investment they make.
Aside from this cultural predisposition, what is it about North American real estate that appeals to Chinese clients? When assessing real estate investments, North America’s strong rule of law gives peace of mind to buyers from China.
The vast majority of residential property in China is leasehold, generally on 70-year terms. Furthermore, in order to cool the property market, the Chinese government has limited the number of land titles that any individual can hold to one or two, depending on the area.
So in addition to a pre-existing cultural preference for real estate ownership, real estate investment in Canada and the United States is made doubly appealing by the fact that:
- it is generally freehold;
- you can hold as many titles as you can afford; and
- your risk is generally only investment-grade, not political or legal.
All of this begs the question: How can real estate professionals position themselves to capture business with the Chinese market and effectively service these clients?
While important, real estate is often just one part of a constellation of needs that Chinese clients have when they consider North America for relocation or business purposes.
Many agents have had success by offering real estate services within the context of a broader range of “settlement services.” This is done by forming alliances with immigration consultants, attorneys and related fields.
For agents servicing the Chinese market, the concept of “full service” real estate can take on a broader meaning: meeting clients at the airport; showing them the key restaurants and shopping areas where they can get a taste of home; advising them on the best schools and school districts; and so on.
When working with Chinese clients, agents must bear in mind the importance of relationships. There is a saying in China that it is harder to find a business partner than it is to find a spouse. This points to the premium that Chinese clients put on personal relationships and trust in the context of doing business.
The concept can be summed up by the term “guanxi,” which roughly translates as: the relationships that allow people to conduct business successfully. Experience has taught us that Chinese clients will generally work with the Realtor with whom they have better guanxi, as opposed to the Realtor who has more sales in the last year.
There are as many ways to build relationships as there are Chinese clients, but generally speaking it is hard to go wrong by investing time (for example, having meals with your clients) and providing high-integrity and consistent service over a sustained period.
From the brokerage perspective, the No. 1 marketing activity you can engage in to capture business from the Chinese market is to hire and retain quality Chinese-speaking Realtors.
We have found this to be much more effective than direct or affiliate marketing to China, whether through consultancies or other means.
When they join a brokerage, Chinese agents bring with them their guanxi — their networks of relationships. Instead of setting up a booth at a trade show in Guangzhou, if you are able to hire and train a motivated agent who has immigrated from Guangzhou, she will naturally have incentives to do business with her sphere of influence in her country of origin.
The end result is minimal wasted resources, regardless of whether the client is buying for investment, relocation or both, which benefits the client, agent and brokerage.
Hiring and training quality Chinese-speaking agents is enabled by having language-specific content to support them. Having marketing materials, market analysis and relevant sections of your brokerage website available in Chinese will serve both your agents and potential clients.
These are just a few insights we have learned from working with Chinese families and investors over the past few decades. There are many other aspects of working with Chinese clients that we have not explored.
Agents who have not yet been exposed in any significant way to the Chinese market should take some comfort from the fact that the simple principles of quality service and integrity apply in equal measure to this market segment as they do to others.
Jonathan Cooper is vice president of operations at Macdonald Realty Group (MRG). Based in Vancouver, British Columbia, MRG has 20 offices and 1,000 staff and Realtors, and offers a full range of real estate services across the province, including residential and commercial brokerage, property and strata management, and project marketing.