RE/MAX Evolution, of Laguna Beach, responds to the influx of Chinese Buyers by setting up (virtual) shop in China! RE/MAX Evolution selected JUWAI.com the leading real estate site in China to host the RE/MAX Evolution virtual office. www.juwai.com/REMAXEvolution.
As China’s housing bubble deflates, an influx of cash deals from Chinese buyers has swept across Southern California’s home market.
A authored by economist William Yu of the UCLA Anderson Forecast, expects more of these purchases from Chinese nationals. “In terms of the bubble deflating in China, right now we’re seeing second- and third-tier cities’ real estate prices going down already,” Yu said. “A first-tier city like Shanghai or Beijing are holding their value, but I would say in the future things are looking more dismal. I would say this kind of incremental investment from China will continue for some time.”
New construction in China has fallen 22 percent, and sales have slumped 7.8 percent this year, according to a May report by Bloomberg News.
U.S. housing, Yu said, is an attractive option to Chinese buyers because they get permanent ownership of the house and the land. In China, the government owns all the land, Yu said, and buyers essentially rent it for up to 70 years.
The climate, education system and relative proximity to China have made California a popular destination for Chinese buyers.
The majority of Chinese Buyers are fearful of having all of their assets in China. They don’t feel like there’s a lot of security in their country.
The Chinese government has really been tightening up how much money leaves the country so we’re probably going to find more people buying $1 million to $1.5 million homes and probably multiple properties.
Overseas shoppers spent a record $92.2 billion buying existing U.S. homes in the year ending in March, with Chinese buyers accounting for a fourth of that, according to a National Association of Realtors survey released last month.
Spending by Chinese buyers on U.S. homes soared 72 percent in one year, to $22 billion, the most of any nationality, according to Realtor estimates. Thirty-five percent of that went to buying homes in California.
About half of the foreign buyers are purchasing U.S. homes to live in year-round — or for their children to live in while studying here, the Realtor report said. Half are maintaining their permanent homes overseas.
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