Shifting Chinese Real Estate Investments
/ SOURCE : yicai
Shifting Chinese Real Estate Investments

(Yicai Global) March 26 --  Property  is considered an investment of choice, and Chinese property  transactions overseas are predicted to hit USD220 billion by 2020. A  survey completed in 2019 by Chinese real estate investors shows a  slightly more interest in countries around the world than  closer Asian countries, with Singapore at only 14% when compared to the  U.S. at 35%, UK/Australia at 24%, and Hong Kong at 18%. Purchases in  foreign countries appear to be slowing, allowing for an increase in  local investments.

Increasing Interest In Local Markets

As recently as 2018, Thailand has become the third most desired destination for Chinese homebuyers behind  only the U.S. and Australia. Despite a ban on foreigners owning land,  condos are the ticket item Chinese investors are putting their money  into. This comes as other countries, such as Canada or New Zealand have  enacted bans or restrictions on foreign investors or possible land  owners. Investors from China have also passed Singapore as  the largest investor in Malaysian property. With the depreciation of  the currencies in Southeast Asian countries, there is also a draw due to  their close Proximity to China and their Belt and Road Initiative  projects. 

Investments Around The World

It's  estimated that since 2010, Chinese investors have purchased more than  USD430 billion of international properties. Despite that large figure,  over the last few years locations in the US, Canada, Australia, and New  Zealand have experienced as significant drop in real estate investments by  Chinese investors. At the same time Europe and Asia saw a significant  increase of 200% or more in real estate investments. While the U.S. has  not enacted any legislation to slow or impede foreign investments in  real estate, the slowdown is seen to be a combination of factors such as  the dynamics of the real estate industry, economic forces and Chinese  domestic concerns. In 2016, China enacted restrictions on the amount of  money which could be transferred out of the country.

The Future of Chinese Real Estate Investment

Investors  have already made a mark on countries where they've invested in real  estate. The return has been increased connectivity and growth for the  countries invested in, and for the investors, they're getting the returns they've expected though  patience and long term investing. However, some countries and cities  have seen it as a possible influence on the politics of a few countries,  or at the very least seen as contributing to increases in pricing and mortgage interests.  With China curtailing the outflow of money from the mainland, it  shouldn't be seen as the death of investing from Chinese investors. This  offers the opportunity for middle-class Chinese to find investments  where they can park their money as they look to secure the future for  their money and their children.

There's  no need to be concerned about the Chinese government's crackdown on  spending outside the country, since Chinese real estate investors are  still set to be largest growing property purchasing group out of all.  With developing countries having better yields than developed nations,  this will always ensure the attraction of Chinese investors for the  foreseeable future. Combined with other motivations such as lifestyle,  emigration and education, ensures Chinese investors will continue to go  outside of China for real estate investments.

[Disclaimer: Yicai Global is committed to providing an open forum to air a diverse range of views. The opinions expressed herein are the author's alone. Yicai Global has redacted this article to conform to our style and usage guidelines, but neither validates its factual nor endorses its editorial content.]

Follow Yicai Global on
Keywords: Real Estate , Investment