West Coast drives home prices to new highs
Foreign investors seeking “plain vanilla” real estate
5 trends that will shape the housing market in 2017
http://fortune.com/2016/12/29/real-estate-trends-2017-2/Happy Investing!
Showing posts with label Chinese real estate investors. Show all posts
Showing posts with label Chinese real estate investors. Show all posts
Wednesday, January 4, 2017
Thursday, June 16, 2016
Chinese Investment in Seattle
Wondering how the greater Seattle area became so popular? It provides “luxuries” that China is lacking- clean air, space to move around, and the opportunity to own land. “In China, you purchase a land lease and after a certain amount of time, usually 75 years, the land goes back to the government,” explained Director of New Markets Development for Berkshire Hathaway HomeServices Northwest, Joseph Ho. Beyond their attraction to Seattle’s culture and environment, Chinese investors are seeking offshore financial stability. This stability is of growing concern, following China’s recent stock market dive. In January, “the Shanghai Composite Index dropped 3.6 percent, putting it more than 20 percent below its December high and entering bear-market territory for the second time in seven months,” according to Bloomberg News.
Although China’s currency has devalued in response to their roller coaster stock market, further investments are not projected to slow. In fact, Chinese investments may actually accelerate, as investors are noticing returns of five to eight percent within the past year; compared to the alternative of leaving their money in China.
To prevent capital flight, the Chinese government has an annual foreign conversion limit of $50,000. How are they purchasing real estate in Seattle? “People with money find ways around that limit,” Kristi Heim, president of the Washington State China Relations Council explained. In fact, there are incentives if they do. Through the EB-5 visa program, foreigners are provided with a way to obtain their green card and immigrate to the United States in return for a capital investment of $500,000-$1,000,000 in an American development that will create ten permanent jobs.
According to the National Association of Realtors, for the first time, Canada has been knocked down to the second largest group of foreign real estate buyers in the United States. Who surpassed them? You guessed it, China.
Not only are Chinese investors purchasing an abundant amount of real estate in the United States, but between March 2014 and March 2015 buyers from China spent $28.6 billion; eight percent of which was used to acquire homes in Washington State, which was only surpassed by 35 percent in California. As a distant comparison, buyers from Canada spent $11.2 billion, though only falling behind China by two percent in terms of buyers.
For decades, buyers from China set their sights on Vancouver, British Columbia, pushing the average single-family home price to over $1 million despite the city’s median income of $71,000. Another result of this craze is an increasing amount of neighborhoods filled with vacant houses due to investors who are solely interested in diversifying their portfolios.
How does this impact your own real estate journey? Chinese investors are willing to excessively overpay for these properties with cash, making it nearly impossible for locals to acquire homes. Since this influx of investors is not projected to slow anytime soon, you will need to be well-armed if you are looking to purchase a home.
Although China’s currency has devalued in response to their roller coaster stock market, further investments are not projected to slow. In fact, Chinese investments may actually accelerate, as investors are noticing returns of five to eight percent within the past year; compared to the alternative of leaving their money in China.
To prevent capital flight, the Chinese government has an annual foreign conversion limit of $50,000. How are they purchasing real estate in Seattle? “People with money find ways around that limit,” Kristi Heim, president of the Washington State China Relations Council explained. In fact, there are incentives if they do. Through the EB-5 visa program, foreigners are provided with a way to obtain their green card and immigrate to the United States in return for a capital investment of $500,000-$1,000,000 in an American development that will create ten permanent jobs.
According to the National Association of Realtors, for the first time, Canada has been knocked down to the second largest group of foreign real estate buyers in the United States. Who surpassed them? You guessed it, China.
Not only are Chinese investors purchasing an abundant amount of real estate in the United States, but between March 2014 and March 2015 buyers from China spent $28.6 billion; eight percent of which was used to acquire homes in Washington State, which was only surpassed by 35 percent in California. As a distant comparison, buyers from Canada spent $11.2 billion, though only falling behind China by two percent in terms of buyers.
For decades, buyers from China set their sights on Vancouver, British Columbia, pushing the average single-family home price to over $1 million despite the city’s median income of $71,000. Another result of this craze is an increasing amount of neighborhoods filled with vacant houses due to investors who are solely interested in diversifying their portfolios.
How does this impact your own real estate journey? Chinese investors are willing to excessively overpay for these properties with cash, making it nearly impossible for locals to acquire homes. Since this influx of investors is not projected to slow anytime soon, you will need to be well-armed if you are looking to purchase a home.
Happy Investing!
Today's blog courtesy of Will Heaton, Heaton and Dainard, Intrust Investing
Tuesday, March 1, 2016
Asian Investors
Shin's family with Korean and Chinese backgrounds were immigrants to Canada, before he moved to the US. He explained many of the reasons why Asians were attracted to Canada, specifically due to the immigrant investor programs that granted permanent Canadian residency at the price of a five-year $800,000 interest-free, government-guaranteed loan, with no requirement to start or invest in a business. That program was terminated in 2014, and triggered a search by Asians looking for a safe haven to invest in real assets.
Currently, China, the world's second largest economy, holds $4Trillion in US currency. They are the largest holder of US treasuries, but many Chinese are looking for better returns by investing in real assets. Their own stock market has become increasingly volatile, while their economy is making a painful adjustment from an exporter to more domestic consumption.
A very popular 2013 Chinese romantic movie "Beijing Meets Seattle" sparked interest in the city of Seattle, just as the Canadian immigration program was winding down. Seattle-Bellevue housing prices are still comparatively inexpensive for Asian investors, in contrast to other world cities like Los Angeles, San Francisco, New York or London.
In addition, Seattle boasts a higher quality of life, with clean air, and good schools. It is an attractive market for foreign investors looking to mitigate their geopolitical risk and diversify or preserve foreign wealth.
The USA's EB-5 Visa program is now attracting a majority of Asian investors. The EB-5 Visa program provides a separate immigration visa for foreigners who invest capital and create full-time employment for US workers. 10,000 visas are awarded each year, with 85% going to Chinese investors. The program capped out for the first time in August of last year,
This foreign investment is a great driver of the US economy,generating over $13 billion in investment since 2008, and creating well over 29,000 jobs. EB-5 is exploding in the Seattle metro area, and a lot of big commercial, governmental and residential projects are being funded by Chinese investors.
A savvy investor will want to keep an eye on this trend for the Seattle real estate market. It will only be getting bigger!
Happy Investing!
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