When I was recently in China, co-workers mentioned that many rich Chinese had recently been buying property in the United States. There were two chiefs causes for this interest in American real estate in the Middle Kingdom. The first was that in the aftermath of the housing bubble bursting, US property was viewed as being a relative bargain and that it was a good time to buy at a lower price. The second was limitation on property ownership enacted by the Chinese government in order to try to cool down their market. It’s difficult to get permission to own more than one property in China at the moment. Since that investment money has to go somewhere and Europe has been looking wobbly for some time, the US is increasingly becoming a preferred location for Chinese buyers.
A story in Friday’s WSJ detailed how U.S. Luxury Real Estate Courts the Chinese Buyer (sub req) and why the Chinese are buying where they are:
Interest is surging even in parts of the country China-based buyers weren't traditionally interested in. Richard Zhou, a 41-year-old investment advisor who lives in Shanghai, paid $200,000 for a home in a large golf community in Fort Myers, Fla., last year. He said he bought in the community sight-unseen, trusting his friend who had bought a home there a few months earlier. Mr. Zhou spent two weeks studying the U.S. real-estate market and quickly decided Florida was a good bet because "it was highly impacted from the financial crisis," adding that later in his life he plans to retire there. "Florida is indeed a sunshine state, the weather is really pleasant, and the air quality is very good. Also, the food is safe, too."
You can’t overemphasize how important that last factor is.
Real-estate agents say that while Chinese investors primarily target New York, Los Angeles and San Francisco, they are beginning to expand into cities in southern Florida as well as outposts such as Seattle and Las Vegas. That's a sea change from a few years ago, when they were "fearful" of Florida, says Steven Lawson, chief executive of Windham China, a Shanghai-based company that helps find Chinese buyers property in the U.S. "There was a false perception in China that Miami is not a supersafe city because a lot of Chinese watch 'CSI: Miami' or 'Miami Vice' on TV."
Miami not a “supersafe” city? Goes to show that you can’t believe everything you see on TV. However, sometimes videos are a different story...
Mr. Kaufman is currently in negotiations to buy a 100-acre plot of land north of Miami in an effort to create Miami's first Chinatown, a free-trade zone with casinos, restaurants, art galleries, shopping and hotels. "We'd call it New China," he says. Others are taking quicker routes: In the past few months, Corcoran's Ms. Liebman has started regularly sending four of her agents to China, forged partnerships with three real-estate companies there and hired several Mandarin-speaking agents in the U.S.
At long last, Miami will finally get some diversity.
