Asian Property Review chats with Knight Frank’s Head of Research & Consultancy, Greater China, David Ji and Savill’s Head of China Research, James Macdonald on the latest phenomenon in global real estate – the Rise of Chinese Real Estate Investors.
- What are factors that have spurred Chinese investors to invest in overseas property in a big way?
David: The increased competition in the domestic housing market was one of the key drivers for the surge in Chinese outbound real estate investment. This trend is also supported by the growing need for diversification from many heavyweight domestic conglomerates in China.
James: Until recently, the appreciation of the RMB was a factor in investors’ decisions to invest in overseas markets, especially after the GFC and the weakening of other currencies as well as the fall in asset prices. As China continues to integrate with the rest of the world (tourism, business and family) and gain a greater understanding of overseas markets, it is natural that Chinese home buyers will seek to invest more in international property markets.
Other factors include migration for a better quality of life in terms of culture, environment, community, healthcare, food safety and air quality as well as for their kids to stay while studying overseas.
Policy support in terms of citizenship and proinvestment policies has been actively promoted by certain governments with many Chinese nationals exploring this as a route to migrating overseas. An example is the EB5 visa program in the US; many countries also offer citizenship in return for real estate investment (Malta, Cyprus, Portugal, etc.)
For the wealthier ones, this forms part of their asset diversification strategy for security of their wealth. For property developers, expanding overseas is a way of diversifying their revenue streams, raising their international profile and learning from overseas partnerships.
- Do you have statistics in terms of top 10 most popular countries Chinese invest in and the amount invested (real estate sector)?
David: Some of the most popular countries include the US, UK, Australia, Malaysia, Singapore, Canada, Japan, France, Italy and Germany.
James: There is no reliable information on the exact amount of money invested by individual Chinese national in overseas residential markets though the top five markets should be the US, Canada, Australia, UK, Hong Kong and possibly Malaysia. Other countries might include Japan and some European countries such as Spain and Portugal.