Real Estate Marketing & Beyond
According to an article in Marketwatch, the number of all-cash sales to Chinese buyers has tripled over the last ten years.
An analysis carried out by RealtyTrac, a realty research firm and Ethnic Technologies, a multicultural marketing company found that 46% of Mandarin Chinese speaking buyers who bought homes in the US in the 17 months ending in May this year purchased their properties with cash. This is more than triple the number who paid all-cash in 2005. Mandarin speaking buyers are the second largest group of non-English-speaking cash buyers and account for nearly 18% of all-cash deals.
The largest group are buyers who speak Spanish and who account for 43% of all-cash deals. Experts have commented that foreign cash buyers have helped push up US home price appreciation during the last few years due to the fact that these buyers are not constrained in the same way as local and traditionally financed buyers.
Median home values in the United States have increased to $180,800 which is the highest level since the middle of2008 and is an increase of 3.3% during the past year. Prices are predicted to rise by another 2.2% next year. Apparently the percentage of Chinese Mandarin speaking buyers also increased by more than any other language group over the past decade, and is up by more than 9%.
The amount spent by Chinese buyers on US property in the year through to March 2014 was $22 billion which is 72% more than a year earlier. These buyers tend to purchase more expensive homes with a median price in excess of $500,000. In the United States, Asian buyers account for more than a third of all international real estate buyers and a guide to real estate investing published by the Association of Foreign Investors in Real Estate is only published in either English or Mandarin.
According to the article, Chinese buyers account for almost half of real estate transactions in Seattle’s more expensive neighbourhoods and more than three quarters of these deals are for cash. Seattle holds a lot of appeal as it is the closest mainland city in the US with good connections to Beijing. The city also offers good education and employment opportunities and as a result property prices in Seattle increased by 12% during the past year and are expected to rise by another 6.4% through next year. Other areas that are proving popular include southern California, Colorado and Ohio.
