Chinese take advantage of slump in US home prices
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![A US saleswoman talks with a potential Chinese homebuyer at a real estate exhibition in Beijing. [Photo / for China Daily]](http://images.china.cn/attachement/jpg/site1007/20101108/0019b91ed7d10e41e3ef27.jpg "A US saleswoman talks with a potential Chinese homebuyer at a real estate exhibition in Beijing. [Photo / for China Daily]") |
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A US saleswoman talks with a potential Chinese homebuyer at a real estate exhibition in Beijing. [China Daily] |
The impact of the financial crisis on the housing market in the United States has provided more opportunities for international investors, with Chinese buyers one of the more active.
The National Association of Realtors said Chinese investors account for about 10 percent of international buyers in the US real estate market. Experts predict this trend will only increase.
"The US has very good environment for real estate investors and Chinese buyers expect to have some bargain prices which wouldn't have existed before," said Richard Dai, CEO of Beijing-based SouFun Holdings Ltd, China's largest property website.
A recent SouFun.com survey showed that among its 18 million members in China, the US is the top foreign country for property investment. Many buyers aim for residential properties, with some looking for cheap ones for business purposes, Dai said.
Housing prices in big cities such as Beijing and Shanghai have risen sharply in the past few years, prompting Chinese buyers to take advantage of the slump in US home prices.
Dai said a two-bedroom apartment in Beijing can cost up to 2 million yuan ($300,000) while a house with four or five bedrooms in some US states can be bought for $500,000. "The calculation is very obvious here," he said.
Dai said that more and more Chinese buyers are eyeing properties in countries such as the US, Canada, the United Kingdom and Australia. Most recently, the Jeju Island in South Korea has also become popular.
Eileen Hsu, a Manhattan real estate agent who specializes in Asian clients, particularly buyers from China, told China Daily: "Foreclosures contribute to the fact some Chinese buyers are looking more in the US, but there are not many in New York compared to California and Florida."
Hsu said some wealthy and sophisticated Chinese buyers prefer to diversify their real estate portfolio.
"They feel that US real estate is a mature and equity safe market to invest," she said.
"The US has a reputation of a beautiful and happy country. The Mandarin name for the US, meiguo, means beautiful country. Thus, it is a status symbol for those who can afford to buy here."
Many of Hsu's Chinese clients buy houses in the US as their second home as they own townhouses or apartments in China.
"They are well-established business people ranging in age from 40s to early 50s," she said, adding that 90 percent of them buy with cash.
"If they use mortgages, they will have to put up to 50 percent or more (as a deposit) and sometimes pay higher interest rate."
The US has historically been attractive for international investors, because of its strong private property rights, independent judiciary, growth-oriented tax laws and liquid capital markets.
Hsu said US law welcomes foreign buyers, although each country may have restrictions as to transferring money out.
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