Chinese nationals investing in foreign property reached a record high this year, and the trend is only growing. China is second only to the U.S. in international buying power. With increasing interest in U.S. property investment, now is the time to optimize your real estate strategy and learn how to tap into this market.
Understanding the investment boomIn 2016, Chinese nationals invested $31.7 billion in U.S. property according to China’s National Association of Realtors. This is an increase of at least
$4 billion from the previous year. With numbers like that it’s impossible to ignore the market potential of Chinese investors.
There are a number of factors that influence this strong trend. China’s gross capital is increasing, with a growing upper-middle class and some of the wealthiest individuals in the world. At the same time, domestic finances are volatile and the local property market is competitive. Chinese have faith in the stability of real estate and look to secure their wealth in foreign properties. With an affinity for property and greater access to information, the Chinese are now investing capital that they have built up for years.
In the beginning of 2017, China implemented new foreign exchange controls that make it difficult to get U.S. money to invest in foreign properties. The regulations have slowed down transactions and increased the number of U.S. mortgages obtained, which is only 26% of purchases. For the most part, Chinese look to buy properties in cash. The more China restricts finances the more interest there will be in getting money out of China. According to
Sue Jong, the chief of operations at the major Chinese property portal Juwai.com, “Chinese buyers trust the American market and believe it is a long-term safe bet. Despite a likely drop this year, investment levels are still in the foothills, but expect higher peaks ahead.”
What and where are the Chinese buying?The prominent US markets for Chinese investors are Los Angeles, Miami, New York City, San Francisco, and Seattle. In 2016, 21% of buyers purchased property as an investment, 39% for residency or as a vacation home, and 8% as student accommodation for their children. 67% of foreign properties were detached single family homes, 14% were townhouses, and 13% were condos according to the NAR study.
A lot of elderly Chinese are buying vacation homes in places with better air quality, food quality, and overall quality of living. Generally, Chinese buy new properties and do more land-development. They also are drawn to places with Chinese communities.
With a growing middle class and increased countrywide capital, not all of those who are investing in foreign property are the super-rich. This means that properties outside of luxury real estate will potentially draw foreign Chinese buyers. In general, they are looking for new properties built to modern standards.
How to tap into the Chinese marketYou should consider having Chinese language material for relevant properties, or better yet a Mandarin or Cantonese speaking representative. Less than 1% of mainland Chinese speak English. If you’re truly looking to tap into this rich market, you should also familiarize yourself with Chinese customs.
The best way to translate and list your properties is by using Juwai.com. Juwai.com makes it easy to list your property in Mandarin or Cantonese by using their translators and also assists with communication to clients. Since websites not hosted in China can be blocked by the Great Chinese Firewall or experience very slow page load times, it’s important to host on a site like Juwai.com. Juwai.com connects you with mainland Chinese, international Chinese looking to buy in other countries, and domestic Chinese looking to buy in their current country.
To appeal to Chinese clients, you should have the information they want at hand. They will want to know about your country’s property laws, immigration requirements, the local education standards, cost of living and quality of living. While they will be doing some of this research on their own, having the information ready will reflect well on you and expedite the purchase process. You should also consider demonstrating your prestige with client testimonials and strong branding. If your client can’t learn anything about you or your company online, they’ll probably look elsewhere.
Another big channel for marketing is WeChat. The communications app is huge in China and is a hub for entertainment, sending money, reading news, and buying everything from car rides to properties. WeChat is a central part of the Chinese internet. Unlike Juwai.com, there is no built-in translation feature for WeChat, but if you have Mandarin capabilities it’s a great way to tap into the Chinese market.
The strong trend of Chinese investing in foreign property isn’t going anywhere. Now is a great time to tap into this market if you aren’t already. To learn more about listing with Juwai.com, contact Sky today.