Chinese invest $110b in US real estate since 2010

Chinese buyers spent at least $93 billion between 2010 and 2015 on US homes, and more than $17 billion on US commercial real estate, according to a new study by the Asia Society and the Rosen Consulting Group.

"More than any foreign investor other than Canada, China stands out for the breadth, depth, and speed of its participation in the US real estate market," according to the report, Breaking Ground: Chinese Investment in US Real Estate, released here on Monday.

In the 12 months to March 2015, Chinese home purchases in the US totaled $28.5 billion, ahead of Canada's $11.2 billion and India's $7.9 billion, with California accounted for 35 percent of sales, followed by Washington State (8 percent) and New York (7 percent).

The report shows Chinese buyers paid a higher price for condos, homes and apartments than other foreign buyers, according to figures from the National Association of Realtors, which recorded the average price paid by Chinese buyers in 2015 was $831,800, compared to $499,600 for other international buyers.

China ranked third last year in US commercial real estate acquisition volume, behind Canada ($24.6 billion worth of investment) and Singapore ($14.6 billion).

Arthur Margon, one of the authors and a partner at independent real estate economics consultants Rosen, said: "This wave of investment is coming from diverse sources in China.

"But that's really a small piece of the potential investor universe."

The study also reveals China is the biggest foreign holder of mortgage-backed securities issued by US government-sponsored enterprises such as Fannie Mae and Freddie Mac, with a total of $207.9 billion, up from $20 billion in 2000.

"Like US Treasuries, these bonds are important investments for Chinese government finances, because they allow for re-circulation of dollars gained by the trade imbalance, and for the US housing market, because they help ensure liquidity and mortgage rate stability," the study said.

Since 2010, the report claims nearly 20,000 Chinese, using an EB-5 visa for immigrant investors, generated at least $9.5 billion of capital and may have created or sustained 200,000 jobs.

The visa program allows a foreign national who invests at least $500,000 in projects that create a minimum of 10 jobs to receive a US visa and, on completion of the project, a green card for permanent residency status. Chinese have been the main recipients of EB-5 visas.

Elsewhere, the study shows half the total $17.1 billion investment by Chinese since 2010 in existing office towers, hotels and other commercial buildings came in 2015, representing an annual growth rate of 70 percent.

Commenting on the findings, executive vice-president at East West Bancorp Inc Wendy Cai-Lee said Chinese buyers are becoming more knowledgeable about the US real estate market.

"Several years ago I had Chinese buyers asking only about the return from a potential deal," she said. "Now they ask about safety and diversification reflecting a greater awareness of the US market."

paulwelitzkin@chinadailyusa.com