Real Estate

Chinese investors have spent $300 billion on US property, study finds

Chinese investors spent $300B on US real estate
Chinese investors spent $300B on US real estate

Chinese investment in the U.S. real estate market has surpassed $300 billion and is growing despite China's economic weakness and increased currency controls, the authors of a new report said on Monday.

Between 2010 and 2015 Chinese buyers bought $93 billion in residential real estate, nearly $208 billion of mortgage-backed securities, and roughly $17 billion of commercial real estate, including office towers and hotels, according to the report by the Rosen Consulting Group and the Asia Society.

Despite those eye-popping numbers, foreign direct investment from China still only makes up 10 percent of all foreign direct investment put into the United States.

However, the report is significant as the first independent study to prove Chinese investors rank among the top in every real estate sector. It also shows Chinese investors have stamina and can withstand short-term market events, said Arthur Margon, a co-author of the report and a partner at Rosen Consulting Group, which specializes in real estate.

"There are strong signals that there will be continued, maybe even increasing appetite," said Margon, during an event at New York's Asia Society.

Sternlich: China biggest buyer of US real estate
Sternlich: China biggest buyer of US real estate

How long the good times will last depends on both the U.S. and Chinese economies. Rosen's team projects the United States will move out of its economic recovery and into a minor slowdown within 18 to 24 months, during which time China's slowdown may worsen.

China's President Xi Jinping said Monday that he will push supply-side reforms and focus on increasing the middle-class, underscoring the pressure the country faces to reverse growth rates that are the lowest in 25 years.

The top towns for real estate investors

Interest from some Chinese home buyers may wane, but overall they tend to have bigger budgets for home purchases than other international buyers, the report found.

The average home price for Chinese buyers in 2015 was $831,800, compared with $499,600 for all other international buyers. In terms of the total dollar amount spent on U.S. homes, China surpassed every other country from 2013 to 2015, the report found.

In 2015, Chinese investors for the first time bought more homes than buyers from Canada, formerly the leading purchasers of U.S. homes, according to the report.

One reason Chinese buyers spend more, the report found, is their tendency to buy in expensive property markets. In 2015, 35 percent of Chinese house purchases were in California, followed by 8 percent in Washington, and 7 percent in New York.

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