- In its latest study, Juwai.com predicts Chinese buyers will invest $80 billion in U.S. real estate during 2017.
In 2016, Chinese real estate investors spent a massive $101.4 billion dollars on U.S. property. That number is expected to drop to $80 billion in 2017, but it will still rank among the top three highest levels of investment in history.
The 2017 investment projection is based on data from Juwai.com — the top Chinese international real estate site — and data from industry companies and governments.
“2016 is the first time in history that Chinese buyers acquired more than $100 billion of international real estate,” said Juwai.com Chief of Operations Sue Jong. “The 2016 total represents a 25.4 percent increase over 2015 and an 845 percent increase over five years.”
“For the Chinese buyer, the United States is a near perfect market,” she added. “The United States received more than US$50 billion, the greatest share of total mainland Chinese real estate investment last year.”
“The United States received more than US$50 billion, the greatest share of total mainland Chinese real estate investment last year.”
Juwai.com says it expects U.S. investment to drop in 2017 because of Chinese restrictions on the transfer of capital overseas, foreign buyer restrictions and taxes in some key markets, and predictions the Chinese economy will slow down in the coming year.
But, according to the report, Chinese buyers’ demand for residential overseas property and corporate demand for international assets and opportunities will outweigh any economic concerns or governmental barriers.
Furthermore, China is still “underinvested” compared to other countries. China ranks only 18th in the world by aggregate ownership of foreign real estate and other assets compared to GDP, at just 12 percent.
“We believe we estimate conservatively when we forecast that Chinese investors will acquire more than US$1.5 trillion of overseas assets in [the] coming decade or so as they close the underinvestment gap,” said Jong in a statement. “Up to half of this new investment could go to property.”
The top five countries for Chinese investment in 2016 were the U.S., Australia, Hong Kong, Canada and the United Kingdom — and that isn’t expected to change in the upcoming years.
Juwai.com says the U.S. remains the “near perfect” market because of positive market trends, openness to foreign investment and the country’s status as an international destination for education, tourism and immigration.
“There is no denying the impact Chinese buyers are having on the North American real estate market,” said Engel & Völkers North America CEO Anthony Hitt, who announced the brokerage will begin showing listings on Juwai.com.
“Empowering our advisers to market to Chinese buyers gives them another competitive edge in winning listings and selling homes,” he added.