“House Hunting” by Chinese investors looking to purchase homes as both an investment and as a second residence—a trend brought up discussed by NAJ founder and CEO Jake Steinman earlier this month at NAJ’s RTO Summit East in New York—is a fact.
Between 2010 and 2015, as just reported in China Daily, Chinese buyers invested at least $93 billion into U.S. homes. The figure comes from a new study by the Asia Society and the Rosen Consulting Group: “Breaking Ground: Chinese Investment in U.S. Real Estate.”
Among the study’s highlights:
—China is the biggest foreign holder of mortgage-backed securities issued by U.S. government-sponsored enterprises such as Fannie Mae and Freddie Mac, with a total of $207.9 billion, an increase from $20 billion in 2000.
—Chinese pay a higher price for condos, homes and apartments in the U.S. than other foreign buyers do. According to the National Association of Realtors, the average home price for Chinese buyers in 2015 was $831,800, compared to $499,600 for other international buyers.
—Half of the $17.1 billion investment by Chinese in existing office towers, hotels and other commercial buildings came in 2015, representing an annual growth rate of 70 percent.
—In 2015, China ranked third in U.S. commercial real estate acquisition volume, behind Canada ($24.6 billion worth of investment) and Singapore ($14.6 billion).
—On the residential side in 2015, Chinese buyers were No 1, topping Canada’s $11.2 billion and India’s $7.9 billion.
—One way in which the housing investment has created long-term visitors is through the EB-5 Visa Program which, essentially, awards a long-term visa to citizens of other countries who invest $500,000 in jobs generating and sustaining projects in the United States. Since 2010, nearly 20,000 Chinese EB-5 investors have generated at least $9.5 billion of capital and may have created or sustained 200,000 jobs, the report said. Chinese have been the number one recipients of EB-5 visas.
Just how extensive is Chinese investment in the U.S. real estate market? Said the study from the Asia Society and the Rosen Consulting Group: “More than any foreign investor other than Canada, China stands out for the breadth, depth, and speed of its participation in the U.S. real estate market.”
