Chinese investment in the United States has tripled in the last seven years, as Chinese individuals and businesses look to diversify their portfolios [1]. The speed in the growth of the Chinese economy in the last few decades has taken the world by surprise, while also creating extra cash reserves that need to be placed safely in high-yield investments. In terms of real estate, the U.S. property market offers excellent potential, with other reasons also at play for the heightened interest by Chinese investors. 

 

Out of all Chinese real estate investments in the US, coastal cities make up the biggest transactions, with California being the most popular spot. This is due to the existing presence of a Chinese community, similar lifestyle, and favored geography. Other hotspots include Los Angeles, San Francisco, and New York, which have been the main draws for Chinese investors for many years [1]. 

 

Recently, however, Seattle is also on the rise. In Canada, a recent tax hike of 15% on foreign buyers in British Columbia has affected property seekers in Vancouver. Those buyers are now looking to Seattle, with searches by Chinese home buyers doubling in the last year. Another cause for interest in Seattle is the fact that housing costs, while steadily increasing over the last few years, still remain far better than other West Coast locations. Its access to clean air and water, not always something that’s easily available in China, also makes it an attractive destination for Chinese buyers [2]. 

 

Many of these Chinese clients are paying in cash. While sellers in coastal U.S. try to Chinese Real Estate Investors, there is some concern among local buyers. Some fear the same situation that happened in Vancouver will take place in these cities. Local officials in Vancouver who pushed for the foreign-buyer tax said that international buyers priced out local long-term residents and often left their properties empty. This reduced the housing stock and drove up prices by over 30 percent in one year.

 

Despite new capital regulations by the Chinese government, the number of buyers interested in U.S. property continues to rise. Between only April 2016 and March 2017, Chinese buyers spent a total of $31.7 billion on over 40,500 housing units. When asked about their reasons for buying, almost two-thirds cited education for their children as their primary motivator. Other reasons include lifestyle and travel opportunities. Seattle is now experiencing a major gold rush with Chinese investments, but it still lags behind other major cities, both inside and outside the U.S. 

 

 

[1] - https://www.citylab.com/life/2017/07/chinese-investmment-in-us-real-estate/534894/

[2] - http://www.seattletimes.com/business/real-estate/seattle-becomes-no-1-us-market-for-chinese-homebuyers/

 

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