Chinese Leading Global Luxury Real Estate Market

Chinese Leading Global Luxury Real Estate Market

***UPDATED: April 2, 2015*** According to a recent article from the National Law Review, wealthy Chinese are seeking out real estate abroad in record numbers. With China’s GDP growth of 7.4% in 2014, the slowest since 1990, coupled with a poor growth outlook and impending real estate bubble, Chinese developers are showing no fear when it comes to taking on large projects overseas. Major undertakings include a £1 billion business district in London, San Francisco’s second tallest residential tower, and a $5 billion development near the Barclays Center in downtown Brooklyn, New York, which will include 14 residential building and eight acres of green space. And many believe that Miami will be the next location of significant Chinese investment, as the city continues to gain international attention as both a leading financial trading center and a world-class travel destination. It doesn’t hurt that Miami also has the allure of a beautiful, coastal location and fantastic, year-round weather. Additionally, Miami’s many ultra-luxury residential options are quite affordable compared to Chinese options. The average housing cost is just $240 per square-foot in Miami and $651 per square-foot in Miami Beach, where Shanghai and Beijing’s prime communities fetch $1,600-$1,800 per square-foot. It’s no wonder Chinese investors are finding Miami opportunities so attractive.

Once upon a time, the wealthiest Russians dominated the global luxury real estate market, especially throughout Europe. They were known to purchase the most expensive properties in London and could be seen driving Aston Martin, Rolls-Royce and Bentley cars around town. But times have changed and the Russians are no longer top dog. In today’s market, it’s the Chinese who are dominating sales.

A recent International Business Times article reports that London’s local businesses have taken notice of the new Chinese money entering their market and are finding ways to capitalize. For example, London’s Jack Barclay Bentley dealership hosted their first Chinese New Year celebration in an effort to attract potential customers, and it worked. But it’s not cars that Chinese are controlling, it’s London’s property market. A study by London-based real estate property consultancy group, Knight Frank, found that investments from the Chinese tripled over the span of a year, reaching $2.8 billion in 2013. Thanks to a visa arrangement between the U.K. and China that was initiated in 2008, investors who spend more than 1 million pounds on real estate are placed on a fast-track, leaving industry experts to project a continued rise in this latest trend.

The United Kingdom isn’t the only market experiencing an influx of Chinese buyers. Investors from China topped the list for foreign investment in Australian real estate in 2013, spending almost 6 billion Australian dollars. Australia is actually in the top three destinations for Chinese real estate buyers, joining Britain and the United States. The Aussies took a cue from the U.K., implementing a visa investment program in 2013, making it easier for Chinese planning to invest 5 million Australian dollars or more in property. Aside from the top three, Paris has also been noted as a popular choice for Chinese investors, experiencing a 25% increase in investment this year. Tokyo is also towards the top of the list as the Japanese yen continues to plummet, leading to almost $230 million in investments in 2014.

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