Chinese buyers are increasing their search for real estate around the world, although government restrictions limit the movement of money out of China.
Some European countries have offered Chinese buyers visa programs linked to buying property. Greece and Cyprus offer residency for three generations of family members. Spain and Portugal are offering five-year residency permits.
Those countries are attempting to access a share of a real estate market with an estimated value of $25 billion. They are also competing with the United States and Australia for real estate business.
Chinese real estate buyers have bought a lot of property in the United States and Australia in past years.
However, Australia’s government on Friday blocked the sale of a large ownership share of S. Kidman & Co. to a group of Chinese companies, according to Reuters news agency. S. Kidman & Co. is the country’s largest private landholder.
China increases controls on money flowing out of the country
The Chinese government has increased its efforts to stop the flow of money out of the country. The People’s Bank of China recently restricted money taken out of automated teller machines (ATM) from Chinese bank branches in western countries.
The bank did this because Chinese tourists often leave behind unused money in foreign cities. The Chinese tourists leave funds in case they return.
The high rate of property buying in 2015 shows that Chinese buyers have been spending more than the limit of money permitted by the Chinese government’s rules. China limits foreign money transfers to $50,000 a year.
Chinese property buyers increased their purchases by an estimated 30 percent in 2015, according to the company Savills Research China. Office building sellers have also noticed an increase in Chinese buying.
One property consultant company, Global Capital Markets, estimated a 46 percent increase in commercial property sales to Chinese clients.
Chinese buyers seek new markets
Chinese buyers also are exploring new property markets. One is in the Middle East. Dubai is part of the United Arab Emirates. Chinese interest in Dubai’s property market has been high in recent years.
Yousuf Kazim is chief executive officer (CEO) of Jumeirah Golf Estates in Dubai. He said, “Interest in Dubai’s real estate from China is already on the up, with interest said to have surged 1,200 percent year-on-year in August 2015.”
He added that, “We see huge potential to market in China. There is a growing affluent and wealthy population seeking to ‘internationalize’ a share of their assets….”
An important reason Chinese buy property in foreign countries is their desire to leave China now or in the future. Some want to move their children to provide them with educations at western colleges or universities.
“Chinese migration is at an all-time high. So they are a majority of our clients,” said Christian Numa, director of Amity Property Group based in Melbourne, Australia.
Getting foreign buyers to purchase real estate has become very competitive. Several European countries, like Portugal, Spain, Greece and Cyprus, offer long-term residency permits to investors who buy houses or a commercial property.
Bobby O’Reilly, a real estate company manager in Portugal, said a large number of foreign investors who have used Portugal’s visa program are Chinese.
“The minimum investment requirement is 280,000 Euros for (a) golden visa and entry into Portugal,” O’Reilly said.
The United States continues to be the main place for Chinese property buyers. However, some realtors say there are few good properties available and very little new construction is taking place.
“A good part of the property is already held by the Chinese, who do not sell. They like to hold property long-term. That is why there (are) few properties available for sale in the market these days,” explained Fred Lam, president of Dragon1 USA, a real estate company in California.
During the past two years, NBC News reports that Chinese investment in property has increased in Detroit, Michigan.
The Associated Press reports that foreign buyers make up only a small part of the housing market in the U.S. However, in cities such as New York, San Francisco, Seattle, Chicago and Irvine, California, foreign buyers, including Chinese ones, have influenced the market.
I’m Mario Ritter.
Saibal Dasgupta wrote this story for VOANews. Jim Dresbach adapted the story for Learning English. He also included information from NBC News and the Associated Press. Hai Do and Mario Ritter were the editors.
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Words in This Story
real estate – n. property consisting of buildings and land
residency – n. a period of time when someone lives in a place clients – n. people or businesses who pay a professional person or organization for services
commercial – adj. used to make a profit as a business or designed for businesses
chief executive officer – n. a person in a top-ranking corporate position, responsible for overseeing operations
automated teller machine – n. a machine that people use to get money from their bank accounts by using a special card
tourists – n. a person who travels to a place for pleasure
affluent – adj. having a large amount of money and owning many expensive things
assets – n. something that is owned by a person or company
golf course – n. a large area of land set up for the game of golf
migration – n. the move from one country or place to live or work in another