NEW YORK—The first hint that mainland Chinese money flowing into New York City real estate may be slowing appeared in survey of the Real Estate Board of New York’s (REBNY) Broker Confidence Index released Thursday, July 30.
The survey rates broker confidence in the city’s real estate market for the next six months. While confidence is still considered high, around 10 percent of the roughly 400 brokers surveyed listed concerns about a slowdown in investment from mainland Chinese, the effect of Greece’s troubled economy, and the effect of fluctuations in the stock market.
The brokers’ concerns lie largely with China’s unstable economic and political situation, and the question of whether or not wealthy Chinese will be able to continue to ferret their money out to the United States.
Setting aside the enormous instability in China’s stock market of late—with over $3 trillion in wealth disappearing in the space of a few weeks—the ongoing crackdown on corruption by China’s leader Xi Jinping continues to strike hard at the psyches of many of China’s wealthy and connected businesspeople and officials.
For example, in April of this year, China issued arrest warrants on Interpol for 100 officials thought to be in the United States and Canada that it accused of bribery, embezzlement, and fraud.
Chinese billionaires are well known for hiding their wealth. According to a 2013 Huron wealth report on the super rich, of China’s 8,100 billionaires, 5,400 of them are categorized as owning “hidden wealth.” And as more and more of these high net-worth individuals are targeted by the regime, those who remain are becoming increasingly cautious.
At the same time, getting money out of China legally can only be done in so many ways, and this too is becoming more difficult.
Tightening in China
Jonathan Miller, CEO and president of Miller Samuel Inc. appraisers, has heard consistently from colleagues over the last year that China has been attempting to tighten outflows of capital from investors.
