It appears, touring for bargain real estate in the U.S. has become the latest vacation craze for wealthy Chinese investors. While Americans may be hesitant to test the home ownership waters, our Chinese visitors are jumping in, attracted by great prices and the wide selection of properties.
In fact, according to the Oriental Horizon program, 7.5 percent of U.S. residential property that was sold to foreign markets was purchased by customers in China, Taiwan or Hong Kong. We know they can afford it – as of 2008, the Boston consulting Group reported China was home to almost 300,000 millionaires – a 20% increase from 2007, and the world's fifth largest number.
Reminiscent of outlet mall bus tours, SouFun Holdings is organizing house hunting tours for Chinese investors scoping out U.S. bargain basement prices for real estate. The company has organized ten tours this year and has over 500 people interested in such an adventure. The well organized tours make the whole real estate experience much more manageable as potential investors don't have the typical language barriers to overcome. Also standing by are broker agents, representatives from law firms and insurance companies.
Yin Guohua, a partner in a Chinese law firm raved about the attractive real estate prices and the many opportunities available. Some shoppers are looking for accommodations for their children attending school in the states. It's not certain how many people on the tours actually walk away with a new property, but the interest is definitely growing. According to Yin, "Chinese people like to keep private about whether they've bought property and how much they've paid for it." Some clients, however, have mentioned that it is still not time to buy and that they expect prices to be dropping even further.
Luo Jie, organizer from China Swan International Tours, displayed a brochure written in Mandarin outlining listings of foreclosed properties in major cities such as Los Angeles, San Francisco, Las Vegas, Boston and New York. He has a group venturing out on a tour in the next few weeks. Some customers are anxious to buy, others are just window shopping and surveying their options.
Luo also mentioned the challenges that Chinese investors run up against when making out of country purchases. The yuan, is not easily converted in most markets and can be exchanged only under certain circumstances such as trade and tourism.
Howard Rosen, a senior manager at Grubb & Ellis in New York, believes it's not easy to purchase U.S. properties without already having assets here. Those with investments in Hong Kong may qualify, but many whose assets are restricted to China may have a harder time.
Real estate in some of the major U.S. cities is beginning to look extremely attractive against comparable properties in Beijing, Shanghai or Guangzhou. Dollar for dollar, you get more square footage for a lessor price. Even a $400,000 or $500,000 property is superior to what can be found in the Chinese mainland.
Author Resource:-
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