In order to protect their money, more and more Chinese have slowed down on buying property at home, and have instead turned to the U.S. as a safer investment.
U.S. as the Better Option
Investors from China have been buying all types of real estate in the U.S., searching for a more secure place to invest their capital rather than in their own economy. At this point, Chinese investors come in second behind Canada in the number of homes they purchase.
Chinese investor interest has intensified recently, especially in the last three months, as the economy at home slowed down even more than expected. The increase in purchases was not even affected down by the devaluation of China’s currency, even though it has made the transactions that much more expensive for investors.
A Small but Important Percentage
Within the bigger scheme of things, overall U.S. home purchases made by foreigners only account for a very section, but they do make a significant impact on markets in cities such as San Francisco, New York, and Seattle. The effect is also starting to be noticed in more affordable Midwestern cities such as Chicago.
Close to 209,000 houses in the U.S. were sold to foreign buyers or immigrants who have lived in the country for less than two years in the twelve months ending with March 2015, representing around 4% of all sales of previously occupied homes for that period. Out of the $104 billion those sales totaled, the biggest portion, $28.6 billion, came from Chinese buyers.
The majority of Chinese investors tend to buy houses priced from $1 million to $5 million, and most of them pay in cash. While it would seem that the devaluation of the yuan would slow down this buying spree, the situation has remained largely unchanged as the buyers are trying to equalize the difference by negotiating bigger reductions in the purchase price of their target homes.