The residential real estate market is still floundering in many areas of the country, but one group remains undeterred: Chinese immigrants—many of whom are purchasing homes with cash. In areas popular with Chinese people in California, Florida, and New York, the housing market is thriving.
A New York-based real estate broker of Chinese descent, who wished to remain unnamed, said many mainland Chinese who come to purchase houses are officials or are investing for their children—or both. The broker, who has access to properties in Queens, Brooklyn, and Long Island, said the market demand from Chinese stems from an inability to have a secure real estate investment in China.
Land in China is leased to property owners and cannot be owned as private property. Home owners only have the right to the land for 70 years, while businesses can lease land for a 40-year period. “If they must repurchase the house in 70 years, how can their children inherit it? How pitiful!” the broker said, adding, “There is no question that the market demand in New York is the best in the world.”
New condominiums in the large Chinese enclave of Flushing, Queens, are in high demand, according to Ms. Guo of New York’s Perfect Group Realty. In one building, newly-released condos almost sold out in a week, and there are currently only three units left.
“I never expected there to be so many Chinese investors,” Guo said. She said many people from mainland China pay the full amount in cash—even for properties selling for more than a million dollars.
Property buyers from China made up nine percent of the $41 billion that recent immigrants brought into the U.S. last year, according to a report by the National Association of Realtors (NAR). In the past five years, Chinese buyers have surpassed those from Mexico, the U.K., and India in real estate purchases—second only to Canadians. The total amount of internationally oriented sales in 2011 was $82 billion, up from $66 billion reported in 2010, according to NAR.
Chinese-American real estate broker, Christine, from Los Angeles, said the areas inhabited by Chinese are thriving. “Houses in areas with good-ranking schools such as San Marino and Arcadia still have an average price of over $1 million. Recently my colleague sold two $4 million houses, and they were both paid in full with cash,” she said. “Because there is often competition for well-priced houses, those who pay in cash will have an advantage.”
“Compared to China, American prices are relatively inexpensive, so immigration has spread from first-tier cities to second- and third-tier cities. The demographics have expanded from the wealthy to people of different classes as well. Whether it is wealth investors or poor asylees, they all want to purchase houses,” Christine said.
Julia, a Chinese woman who moved to Atlanta through the immigrant investor program said: “Back in rural Beijing we bought an 8,600 square foot secondhand house and it cost more than 10 million RMB (US$1.59 million approx). The house we bought here in Atlanta is around the same size or larger, with five bedrooms and seven bathrooms, located next to a golf course, a lake, and surrounded by deer, and only cost us $600,000, which is 4 million RMB—much cheaper.”
With reporting by Jenny Liu, Hannah Cai, and Charlotte Cuthbertson.
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