Home > Overseas Investment News > Chinese investing in U.S. real estate
Chinese investing in U.S. real estate
Brief:China's ultra-rich have been buying property in the U.S. for years,and more and more Chinese are eager to invest in US real estate.
Mr Zhen a real estate developer from the southern city of Changsha is heading to the United States on a shopping trip, looking for a $1 million home in New York City or Los Angeles. He is part of a growing number of Chinese who is one of 40 investors going to New York, California, Boston and Las Vegas on a Feb. 24-March 6 tour organized especially for investors who want to take advantage of slumping U.S. real estate prices.

"It's a great time to buy because of the financial crisis, and houses in large cities like New York and Los Angeles will definitely go up in a few years," Zhen said. Mr Zhen spent $3,500 for the 10-day trip to view $500,000 to $1 million homes, and it worked.

He found a house in California's Silicon Valley that he planned to buy for his 20-year-old daughter, a university student in Boston who plans on attending graduate school in the Bay area.

"My daughter's monthly rent is $1,000, so it makes sense to buy a place, because I'm getting a return rather than throwing money away," said the developer. The price of the house, he said, was $1 million, "The price is low now, but it's in a good neighbourhood with breath-taking views, so it will definitely appreciate," he said.

While China's ultra-rich have been buying property in the U.S. for years, the buying tours are new, made attractive by still-rising Chinese income levels. China had the world's fifth-largest population of millionaires in 2008 with 391,000, up 20 per cent from the previous year, according to Boston Consulting Group. Meanwhile, high-level incomes have continued to rise.

But Chinese with money in the bank have few good investment options at home. Real estate prices have cooled and stock prices peaked in October 2007 after a two-year boom that saw shares rise six-fold in value. After years in which foreign money poured into China to take advantage of the hot economy, economists estimate that tens of billions of dollars began leaving the country in the last three months of 2008 as Chinese investors began bargain-hunting.

Chinese buyers are looking at both commercial property and homes to rent out or use on business trips. And the U.S. has plenty of unsold homes to offer — 3.67 million as of the end of December, according to the National Association of Realtors.
Relevant Information