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The Chinese economy may have slowed down since 2014, but the country’s strong appetite for overseas real estate continues to be as strong as ever. Cash rich buyers from China continue to be the biggest buyers of overseas properties around the world.
This is in spite of the fact that the Chinese stock market has suffered a fall recently and the value of the renminbi, the Chinese currency, has taken a hit. The interest of wealthy, high net worth Chinese buyers has only increased because this as there is now a much stronger motivation to invest in properties abroad.
Indeed, it doesn’t look like a 1% to 2% devaluation of the remnimbi is going to have any impact at all on cash rich Chinese buyers. They will continue to invest heavily in overseas property, although there might be changes as to where they invest.
The Chinese government has moved on to curb the outflow of capital out of China by putting a $50,000/year cap on overseas property investment. But the wealthy Chinese individuals have got around this buy sending money through family and friends living abroad.
Many have channelled funds through export oriented businesses and others have planned meticulously to invest as much as possible on buying overseas homes and apartments. Indeed, the new regulations from the government have only motivated more Chinese buyers to invest abroad.
What began as a trickle is now turning into a flood. There is no let up in the massive interest shown by Chinese individuals in overseas property, especially in Europe.
What motivates Chinese buyers?
Most wealthy Chinese buyers are motivated by a few common factors to invest in properties abroad.
Investment: Wealthy Chinese investors look for higher returns, high capital gains and diversification of portfolio.
Security: It is the desire of Chinese buyers to divert a significant part of their financial assets abroad because of a need to get their money out of the Chinese government’s reach. In China, the government is known to raise taxation arbitrarily and the respect for property rights of individuals is just not there. That’s why wealthy Chinese look to buy properties in countries with stronger property rights.
Family: Many wealthy Chinese have children studying in universities abroad, so there is a strong desire among parents to be close to their kids. Also, Chinese families with smaller children feel that they would benefit from living abroad because of the cleaner environment and better law and order situation.
Residency: A number of countries incentivize Chinese individuals to invest abroad by offering special Golden Visa programs. Spain and Portugal offer residency permits to non-EU nationals who invest 500,000 EUR or more in property in their countries. Greece and Cyprus offer similar privileges for an investment of 250,000 in properties. The United States has the U.S. EB-5 visa program to encourage foreigners to invest in properties in the U.S.
So which are the top overseas property destinations for cash rich Chinese buyers?
The United States is the favourite destination of most Chinese property hunters, who have bought properties in that country worth an estimated $28.6 billion in 2015. Chinese buyers recently overtook Canadians are the biggest buyers of American properties.
Chinese buyers are among the biggest buyers of overseas properties across Europe, especially in Spain, Portugal, Italy, Cypress and Greece.
The Chinese invest heavily in Australia as well. Indeed, the rise in Sydney and Melbourne property prices over the last four or five years has been attributed to the Chinese interest in Australian properties. Chinese buyers have purchased homes and apartments worth $60 billion from 2010 to 2015 in Australia.
Canada is another favoured destination. The rise in property prices in Toronto and Vancouver have been attributed to the increasing Chinese interest in these markets.
Finally, to sell your overseas property to cash rich buyers from China, you must market it aggressively on Chinese property portals, property shows, online forums, etc. That is why hiring UK and Irish estate agents who specialise in selling overseas properties to Chinese buyers can make all the difference. If you want to sell overseas property for cash contact us today