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US Property Market Attracts Large Number of Chinese Investors

property marketThe Real Deal, a New York real estate news portal, reports that wealthy Chinese investors find the idea of investing in the US real estate market attractive especially after the further decline of the Chinese stock market in August.

The wealthy in China do not know how to invest their money—leave it at home in hopes that the stock market will recover or invest it in fast-growing real estate sectors overseas. Chinese investors have not yet panicked; instead, they have decided to invest their funds outside the country.

Predicting a rise in number of Chinese investors in US real estate, James MacDonald, who heads the China-based Savills Research, said:

Chinese investors who were looking at investing overseas may bring forward their purchases. While some of those that may not have been considering the purchase of property in the US may now look at doing so.

According to King5, a Seattle news portal, Chinese families have been buying more property in Seattle especially as property price in Seattle is giving them more value for money.

However, a broker called Lili Shang says that this does not necessarily mean that China’s economy is going to slide further. It could just indicate that the Chinese are getting more enthusiastic about investing overseas.

Svenja Gudell, a chief economist at Zillow, a site that conducts research on real estate, says that the Chinese consider the US real estate market to be a moderate-risk, but high-return way of investing their money.

Even before this development, wealthy Chinese investors were the biggest group of US real estate purchases. The US National Homebuyers Association reports that the Chinese had purchased 16% of the total number of condominiums and single homes bought by foreigners in 2014. These homes cost an average $831,800 each. The US Census Bureau says that domestic buyers spend an average of $345,800 on a family home.

Douglas Elliman, a prominent real estate brokerage based in New York, specializes in Chinese investors. One of its brokers, Emma Hao, reports that the Chinese are indeed getting more enthusiastic about purchasing property in the US. She said:

Because they are insecure about the economy and the politics, with the RMB devaluation, the stock market got mashed, and the real estate in China is a big bubble—there is nowhere to go.

Hao also says that the Chinese consider the US to be more socially and politically stable and hence safer for investment.

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