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Chinese overseas property investment ‘to soar’ in 2015

UpdateTime:2015/12/14  Hits:

Chinese overseas real estate investment is set to soar in 2015, with Europe becoming increasingly popular, says a leading real estate website.

The United States is still the number one target for buyers, but many are now also considering European countries, particularly those offering ‘Golden Visa’ property-for-residency schemes, says Juwai.com.

With the US, Japan and some other countries relaxing visa regulations, Chinese outbound tourism is set to rocket in 2015, boosting overseas property investment and immigration figures in turn, says the leading Chinese-language overseas property website.

As the Chinese New Year holiday starts on 19 February, when wealthy Chinese often property-hunt while on holidays abroad, demand is set to soon rise, says Jawai co-CEO, Simon Henry.

“The growing wanderlust of the Chinese has not only stimulated global economies – 1.8 million Chinese visitors contributed US$21 billion to the US economy in 2013 alone – but also spurred luxury hotel and commercial investments by Chinese conglomerates in gateway cities.”

Several iconic hotels, landmark and major commercial buildings were acquired by Chinese buyers in 2014, including the Waldorf Astoria, New York, for US$1.95billion, the Marriot Champs-Elysee, in Paris, for US$468 million and London’s Canary Wharf building for US$1.35billion and Lloyd’s Building for US$388million, and the trend looks set to continue in 2015.

“With the relaxed outbound investment rules by China’s Ministry of Commerce, we foresee more commercial investments to come in 2015,” says Juwai.

Residential property investment also grew, with Chinese buyers spending US$22billion on American property, almost double 2013’s total, according to National Association of Realtor data.

But a new destination is likely to take over from California in 2015 – Washingston state, boosted by the popularity of a hit movie, says Juwai. Co-CEO Simon Henry, “We’re at the very beginning of the Chinese outbound investment cycle. It’s the tip of the iceberg.”

“Washington shot up in popularity with Chinese buyers in 2014, particularly Seattle. This is largely believed to be due to its close proximity to China and a Chinese blockbuster movie titled “Beijing Meets Seattle”, which gave the destination a good deal of exposure to the China market,” says Juwai.

Japan also seems to be increasingly popular with Chinese buyers. An up-and-coming investment and travel destination, Japan has received nearly $230million in real estate investments from Chinese buyers and corporate investors – three times more than last year.

“Driving factors include the declining yen and 2020 Tokyo Olympic and Paralympic Games, which spurred a deluge of Chinese tourists and subsequently propelled investments in vacation homes – 2.01 million Chinese visited Japan between January-October 20148, an 80.3% surge from 2013,” says Juwai.

“Europe, however, should be the star of 2015. Emigration will play a huge role in driving property investment in Europe.”

One Australian real estate agent who exhibited with Juwai Event Services at a property expo in Shanghai, China, got more questions than he expected about visas.

Alexander Stevenson, Investment Specialist with LJ Hooker Sunnybank Hills in Brisbane, Australia, says, “There were people looking at investing over here and others looking at migrating. The buyers looking at emigration had so many more questions than we expected. They wanted to know about immigration, tax, schools, and so on.”

Mr Stevenson generated one offer, 50 registration of interest by buyers, 10 qualified prospects, and the likelihood of two or three additional sales. “We will definitely go back because the market potential is incredible.”

For those considering emigration, Europe has become more of a focus as openings in Canada have shrunk dramatically. Canada’s new Immigrant Venture Capital now accepts only 50 wealthy migrants each year, effectively shutting out 45,000 wealthy Chinese applicants previously on Canada’s ‘Millionaire Visa’ wait list.

The UK government also doubled the minimum investment amount for its Tier 1 Investor Visa Scheme to £2 million (US$3.13million).

In Europe, there are at least six countries attracting the attention of Chinese citizens looking to buy property and emigrate, says Juwai.

Portugal
Europe’s top investment immigration destination, 85% of Portugal’s 1,936 ‘Golden Visa’ beneficiaries were from China. Rising interest came from its now stable ‘Golden Visa’ programme and its relatively cheap properties, such as Lisbon’s Chiado or Avenida da Liberdade, which are 25-times cheaper than London’s Bond Street. In fact, one in five foreign property purchases in Portugal within the first nine months of 2014 were from Chinese.

Greece
Property prices declined by 37.8% since 200910 in Greece, which recently announced a new three-generation citizenship visa for US$250,000 in a bid to attract more High Net Worth investors. Should a proposed new policy be approved, Chinese investor immigrants will also be able to receive full Greek citizenship (and subsequently full EU advantages) within seven years.

Spain
One of Europe’s top second-home destinations, Spain has seen its property prices slide 30%-50% since 2013, leaving a slew of prime properties to snatch up at a steal. This yearis also the 40th anniversary for diplomatic relations between China and the EU, and a new round of economic stimulus plans set to take effect in 2015 will mean potential opportunities and economic recovery for Europe.

Hungary
This is the only European country from the Schengen immigration programmes that only needs six months (as opposed to a five-year wait in other countries) for permanent residency. Hungary offers an investment immigration plan that can even be completed entirely in China and does not even require applicants to reside in Hungary. Although its price was for 2015 increased to €300,000, Hungary offers an alluring option to wealthy Chinese.

Bulgaria
With a lower investment bar and the offer of accelerated citizenship, Bulgaria is an attractive option for Chinese investors who are keen to settle in the UK but baulk at the UK visa price hike.

Italy
Boasting a rich culture and history, excellent educational offerings and generous benefits, Italy is undoubtedly an attractive option for Chinese buyers. Property value is also apparent, with Rome and Milan as safe and secure cities to invest in. However, complex Italian policy may hinder Chinese immigrants, so Italy remains a conundrum.

Besides Europe, Australia will also be popular and could see a 15-20% rise in Chinese property investment, says Juwai, particularly now that it offers a Premium Investor Visa that promises permanent residency within a year for an investment of A$15million (US$13million).

Juwai co-CEO Andrew Taylor is due to be interviewed at the Property Portal Watch Conference in New York on Monday 26 January-Tuesday 27 January on how Juwai is capturing the overseas buyer market.

 


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