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During the 12-month period ending in March, Chinese buyers spent a combined US$22 billion on housing in the United States, up by 72%, compared with the same period a year ago, and taking up 24% of the total housing purchases made by foreigners in the United States, according to a report released by the US-based National Association of Realtors.
Lu Heren, president of Meritros Investment Group, said the return rate for investing in the housing market in the United States could touch 8% after fees such as property tax are deducted. The relatively higher price of rent will also allow housing owners to recover the cost in six to seven years, according to the report.
In comparison, it may take a homeowner a century to recover from buying a residential property in Beijing, Lu added.
In addition to the wealthy, more Chinese belonging to the middle class are choosing to invest in the housing market abroad rather than in their home country. The real estate market in the United States is more mature and even with the sector suffering a significant decline after the 2008 financial crisis, it has gradually revived and become stable, Lu said.
Zhang Dawei, chief analyst at Centaline Property Agency, said that since the overall economy abroad has been recovering, many Chinese nationals have sold their property in China and bought homes abroad. However, several risks have emerged from such overseas investment, such as the uncertainty in foreign government policies and the constantly changing housing sector overseas.
Not everyone can profit from their investment abroad, Lu said.
Some Chinese buyers bought housing in Detroit after the US city went bankrupt. But poor public security made it difficult to lease the houses.
Yan Yuejin, a researcher at the Shanghai Yiju Real Estate Research Institute, also said that some real estate agencies hide the possible dangers involved and exaggerate the high returns on such investments in order to boost their sales performance.