Chinese investors are looking to spend some of their new-found wealth on a real estate abroad, with increasing numbers attending property exhibitions.
While Hong Kong property has proved popular in the past, many Chinese now feel it is overvalued and are looking to alternative markets, especially cities which already have well-established Chinese populations such as London, San Francisco, Singapore and Sydney. Investors are buying anything from foreclosure condominiums in Florida to multimillion dollar beachfront villas in Vietnam.
The Chinese began investing in international property much later than Hong Kong citizens, who are usually wealthier and whose currency is more easily convertible. The attractions of buying foreign property include better education opportunities for their kids, and in some cases,the option of immigration.
A considerable number of Chinese send their children to the UK to attend college. There were an estimated 100,000 Chinese students in the country last year, compared to just 4,000 in 1999. London is particularly attractive as it currently has four of the world’s top 100 universities.
The U.K.’s largest homebuilder, Barratt Developments Plc, has revealed that 42% of their London homes sold this year were to overseas buyers, all of whom were Chinese. While the wealthier Chinese are choosing properties in prime locations such as Knightsbridge, Kensington and Mayfair, the newly rich are choosing homes in the Docklands and Canary Wharf.
Other European markets proving attractive are Germany, Turkey, Spain and Italy, while in North America, Vancouver in Canada is one of the most popular cities. Sales of Vancouver property have rocketed recently, with the median price of a detached house in greater Vancouver increasing by 13% in 2010 to $792,000.
Although the annual limit for Chinese citizens to buy foreign currencies is just $50,000, it’s not proving to be any real obstacle, as many of the wealthiest buyers have located their trade companies or offices in countries without currency restrictions, enabling them to pay through their companies’ offshore accounts.