Visa shift to spur US home purchases

Chinese have another incentive to buy US real estate beyond prestigious addresses - the new 10-year visas for business, travel and tourism and five-year visas for study.

Premium real estate in the United States has been snapped up by Chinese for some time.

The Waldorf-Astoria hotel in New York was bought by a Chinese insurance company for $1.95 billion in October, and there have been regular purchases of high-end properties in major cities including New York and Los Angeles.

The US and China announced the policy change for visas on Nov 10 during the Asia-Pacific Economic Cooperation forum meeting in Beijing. It took effect on Nov 12.

Lawrence Yun, chief economist for the National Association of Realtors in Washington, DC, said the new visa rule will bring more Chinese to the US, as it eases reapplication and re-entry procedures.

"Some will want to visit for vacations and will therefore want second homes," he said by e-mail.

"Chinese have already been making huge gains in purchases of US real estate, and this trend could easily accelerate further as a consequence of the new visa rule and of ever faster-growing GDP in China compared with the rest of the world."

The new visa validity periods are further opening up commercial prospects between the world's two largest economies - in real estate, education, tourism and business.

Andrew Taylor, co-chief executive officer of real estate website Juwai, told China Daily from Hong Kong: "It is a game changer. Since Nov 12, we've seen a 35 percent increase in inquiries."

Juwai is a Chinese website for real estate buyers. It is based in Shanghai, with an office in Hong Kong and one planned for Beijing.

"The US government is working with the Chinese government on providing a jurisdictional incentive to encourage consumers to engage," Taylor said of the new visas. "We think that's the future for the world."

Juwai's data show that 60 percent of wealthy Chinese citizens are considering moving overseas, and 85 percent of them want to educate their children abroad. The US is their top destination.

The average price of properties that users inquire about is $1.17 million, but they have budgets for purchases of about $3 million on average, according to Juwai.

The US city with the most Chinese investment in real estate is Los Angeles, followed by New York, Atherton in California (an affluent Silicon Valley suburb), San Francisco and Dallas, according to Juwai.

Taylor said Chinese investors are in the top five among foreign investors in 46 of the 50 US states.

"We're going to see more people from the middle class in China accessing the US," he added.

williamhennelly@chinadailyusa.com