Chinese citizens are the top foreign buyers of homes in the U.S. As Beijing cracks down on money going abroad, will America’s real estate market feel the impact?
According to a recent report by NAR, Chinese buyers have been the top foreign buyers of U.S. residential property for three straight years, hitting a record high. As a group, they surpass top buyers from Canada, the U.K., Mexico, and India.
Between April 2016 and March 2017, Chinese buyers purchased more than 40,500 housing units, worth a total of $31.7 billion. That’s up from of 29,000 units and $27.3 billion the year before. Sixty-seven percent of those units were single-family homes, and 61 percent of all sales were made in suburban areas.
With housing prices on the rise, Chinese buyers are also looking beyond just California and New York, which have been popular thanks in part to the prominence of Chinese culture there. Texas, Virginia, Florida, and Indiana, for example, have become top destinations this year, according to NAR, as buyers expand their geographical reach in search of a better bang for their buck.
And while Washington state didn’t make it to NAR’s top destinations (NAR analysis actually found investment there declined), data from Juwai suggest that the top market so far this year lies in the greater Seattle area. The area saw an influx of foreign interest last year after neighboring Vancouver (another hotspot for Chinese investors) imposed a 15 percent tax on foreign buyers.
The impact of foreign investors
Chinese investors are surely welcome business for sellers, who hope to attract buyers with customized homes adhering to feng shuiprinciples, and developers breaking ground on new projects, including luxury high-rises and McMansions catering specifically to that group. On average, Chinese buyers spent $781,801 on a home in the 12 months before March 2017—that’s more than $200,000 above the average spent by buyers from the next leading countries.