The Chinese Lunar New Year is fast approaching, and the year of the White Rat is nearly upon us. What does that mean for the real estate market? Let’s have a look.
In China, the Lunar New Year holiday is a full week long. Much of the country stops work and heads to their hometown for family reunions or overseas for well-earned holidays. The official forecast is for more than 7 million Chinese to travel abroad during this year’s holiday, which runs from Jan. 24-30. That is 11 percent more than last year.
The United States is among the places they will visit, especially the coastal and southern markets with the largest Chinese populations.
How are real estate agents making the most of the fact that a large number of well-off overseas potential property buyers will be in the country?
Dean Jones, CEO of Realogics Sotheby’s International Realty in Seattle, has been an innovator in marketing to overseas buyers for years.
If you don’t live in Seattle, you might not realize how international the city has become over the past decade. It is consistently, according to Juwai.com data, a popular destination for Chinese buyers in North America.
When I asked him if he was expecting an uptick in Chinese buying during the Chinese New Year holiday, he said, “The short answer is yes, we see an increasing level of interest from Asia as we approach the Chinese New Year.” He pointed out the Chinese are now the number one overseas visitor group to the Seattle area.
Jones told me that the protests in Hong Kong and the foreign buyers’ taxes in Vancouver are sending Chinese buyers to Seattle. In fact, in the weeks before the holidays, he sent a team on a multicity China marketing tour.
In Tampa Bay, Florida, Lena Tan told me that she is negotiating purchases for two Chinese buyers. Tan, a multilingual agent with Berkshire Hathaway HomeServices Florida Properties Group, hopes to have contracts signed by the end of the Chinese New Year holiday.
“Chinese buyers who come during Chinese New Year are usually visiting family and are curious about the real estate market.” That’s what Jessica Chan, an agent with RE/MAX Real Estate Mountain View in Calgary, told me.
Most of the buyers she works with during Chinese New Year have friends or family living nearby. They are also thinking of moving to Calgary and are curious about what they can afford. Real estate is so expensive in China’s big cities that U.S. and Canadian prices seem like a bargain by comparison.
As for the investment limits, the typical consumer is allowed to move $50,000 overseas per year. But there are Chinese banks that will give their clients a mortgage in the U.S. based on assets you hold with them in China. And of course many Chinese earn income overseas due to international businesses or international business transactions.
Chinese New Year is just one of the two so-called “golden week” holidays that the Chinese have every year. The Chinese New Year holiday is a time for family, more so than the National Day golden week holiday in the autumn.
One interesting fact is that Juwai.com data shows that Chinese buyers make an average of 60 percent more property buying inquiries in the weeks after Chinese New Years than in the typical week during the rest of the year.
If you have ever gone on holiday and fallen in love with the place, then you understand why. They get home from their vacations curious about how much homes cost in that place they just visited and where they just had such a good time.
That is one reason the holiday is so important for agents. It is a chance to build relationships and show properties to buyers who might make a transaction from afar after they go home.
May you have a happy and prosperous year of the White Rat.
Georg Chmiel is Executive Chairman of Juwai.com and Chairman of ASX-listed iCar Asia.
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