The big spenders: Understanding Chinese property investors

Chinese investment in overseas real estate hit a record high in 2016, according to JLL. With buyer appetite showing no sign of stopping, how well do you understand global property's big spenders?

CN Tower, Toronto, Canada
CN Tower, Toronto, Canada

Research by TheMoveChannel.com highlights how much Chinese interest in overseas real estate has risen, with visitors to the portal from China climbing 25 per cent in the last year. This is despite the introduction of tougher capital controls for Chinese buyers at the end of 2016. Indeed, according to a study by Juwai.com, only one in four Chinese buyers consider financing or transferring money to be their biggest challenge in buying real estate overseas.

The Chinese portal’s consumer survey sheds a light upon a number of buyer preferences when hunting for real estate abroad. Investors are more likely to target new build properties than existing homes, with 77 per cent ranking new homes as a top-level interest – higher than the 42 per cent who cited existing homes as a preference.

Chinese buyers are also closing transactions more quickly, with 73 per cent spending less than six months researching before purchasing a property – in previous years, it was very common for buyers to spend 12 or 18 months researching a transaction.

While wealthy investors are widely associated with China, they are also highly conscious of cost: low cost-per-square-foot is now the most important factor for Chinese buyers, overtaking neighbourhood safety, which was the number one concern for 2016.

“Nearly twice as many respondents prefer new homes than existing or second-hand property. They feel that new property is easier to manage, of more dependable quality and cheaper to maintain than existing property,” comments Charles Pittar, CEO of Juwai.
“If you don’t understand your buyers, you are not going to be as successful with them,” he adds.

With research from CBRE highlighting how much outbound capital from China has increased in recent years, from $8.1 million in 2013 to $28 million in 2016, understanding Chinese buyers is more important than ever for the global property industry. In Cyprus, Chinese investors are a major driver in the construction sector’s recovery. In the USA, the dollar volume of sales from Chinese buyers exceeded the total dollar sales figure of the next top four ranked countries combined. In Portugal, applications for Golden Visa investments have been dominated for Chinese buyers, contributing to a total spend of €2.3 billion on property. In Australia, Chinese investors account for an estimated 80 per cent of overseas interest. In Canada (pictured above), foreign buyer taxes have been introduced in response to concerns about the impact of international real estate investment, particularly from China.

How well do you understand Chinese buyers? Here’s a handy infographic to fill you in on the essentials for 2017:

Chinese-investment-2017-a

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