Chinese appetite for U.S. real estate still strong
8/29/2016 | Real Estate Blog
Pennsylvania investors who follow the U.S. residential and commercial real estate markets are likely aware that their Chinese counterparts have been very active in recent years. During the 1980s, iconic American properties like the golf complex at Pebble Beach and New York City’s Art Deco landmark Rockefeller Center were scooped up by Japanese investors, but Chinese nationals now make up the largest group of foreign property buyers.
China buyers have poured in excess of $110 billion into U.S. property markets in the last five years, and some consultants expect that figure to grow to about $218 billion by 2020. While media coverage of this buying spree has tended to focus on high-profile commercial property deals, the data shows that Chinese buyers have been active in the residential sector as well.
According to the Asia Society, $93 billion of the $110 billion spent by Chinese property buyers over the last five years has been spent on homes. Chinese nationals tend to prefer residential properties in desirable markets like New York, Miami and Los Angeles, and the data indicates that they normally spend about $832,000 for a home. While the buyers of some of these properties intend to rent them out or sell them later for a profit, many other Chinese nationals intend their new American homes to serve as either their primary or secondary residences.
Dealing with overseas buyers adds a layer of complexity to residential or commercial real estate transactions, and attorneys with experience in this area may be able to help their clients to avoid cultural pitfalls when negotiating with foreign buyers or sellers. Attorneys could also review contracts and other documents to identify language or provisions that may be considered inappropriate by those unfamiliar with American business practices.