European and US real estate stand to benefit from the $billions being spent by Chinese property investors. They are now leading the way in investing in international real estate markets. The China influence could prove to be one of the biggest factors in helping the US and European property sectors rocket in the next 12 months.
Investment coming from China has the real potential to have huge impact on the U.S. real estate sector. European property markets are benefitting from Chinese money, London is a prime example of how the Chinese can send demand sky high.
Jane Marr from the European property portal Europeanproperty.com recently launched its Chinese version â The Chinese are keen to snap up real estate in Europe and are without doubt taking the lead where the Russians used to dominate"
According to commercial real estate services firm CBRE, Chinese outbound capital flows into global commercial real estate markets have exceeded $10 billion in a year for the first time ever. And that could very well be just the âtip of the icebergâ for investment capital coming out of China and looking to flow into real estate, says Dr. Henry Chin, head of research for CBRE APAC in Hong Kong.
Overseas property portal Homesgofast.com â Chinese buyers are bold and will look at most areas in Europe and the USA. But without doubt US and European cities appear to be high on their agendaâ
Globally, the Chinese are one of the most active sources of capital. According to JLL, Chinese investors led the way with $1.9 billion in acquisitions during the second quarter, followed by investors from South Korea at $700 million, the United Arab Emirates at $600 million and Canada at $500 million. Foreign capital is coming from a variety of countries. However, there is a definite uptick in interest from China.
Research firm The CoStar Group estimates the volume of foreign investment transactions during the first half of the year at an even higher level of nearly $39 billion, while Real Capital Analytics (RCA) data shows foreign buyers have purchased some $71.6 billion in U.S. commercial and multi-family real estate in the past 12 months. That data certainly shows that the U.S. continues to be a prime target for foreign capital. In fact, cross-border investors accounted for 24 percent of all investment sales in the U.S. in the second quarter, according to JLL.
Property portal Juwai.com aims to put Chinese speaking consumers with real estate listings worldwide , it estimates QDII2 â if rolled out nationally â could theoretically deliver as much as US$2.3 trillion to international residential real estate markets alone.
âThe likely amount is probably closer to US$661 billion,â Juwaiâs co-CEO Simon Henry said. âThe latter figure depends on a reasonable estimate that wealthy Chinese individuals allocate approximately 10 percent of their total assets to international real estate, both commercial and residential.â.
Following recent turmoil in China's stock market, many European markets are welcoming a further influx of Chinese investors.
Last month saw a crash hit the Chinese property market and quickly wipe out around 30% of its value before the government could step in. Now, the country's investors are likely to look for places to shelter their funds away from the storm, and many real estate industry figures believe this means a further move towards the property markets of Europe.
Chinese investors already invest prolifically in property assets in Europe and around the world, and the past few years have seen Chinese activity in foreign investment markets increase rapidly