Pedestrians pass a map of the street closures on Broadway in New York, the United States, April 27, 2019. (Photo: Xinhua)
US residential real estate, the most appealing overseas investment item among Chinese investors in recent years, is increasingly being shunned as bilateral trade tensions build.
US real estate is being transformed from a stable, appreciating asset into a risky class of investment in Chinese eyes, after the US started a trade war against China.
“I will definitely skip the US if I buy a property abroad, given the escalating tensions between China and the US,” a Beijing-based entrepreneur surnamed Wang told the Global Times on Monday. Wang has been considering buying an overseas property since 2017, and the primary option for her was American housing.
Her daughter had planned to apply to a US college like some of her classmates, but after the US imposed tariffs and tensions kept building up last year, her family finally made the decision to send her daughter to Canada.
However, now even Canada doesn’t seem safe enough since Huawei CFO Meng Wanzhou was arrested in December 2018 there. Although China has only issued a warning for students headed to the US, her concerns are growing and she has totally given up the idea of buying a property in Canada.
“If the relationship between China and the US and its close ally Canada was in good shape, I would certainly buy a house there for my daughter’s study and as an investment, but the risk is quite clear now,” Wang said.
As the US tightened its visa requirements for Chinese nationals and imposed other restrictions against Chinese scholars and companies, more and more Chinese have started to feel unsafe in going to the US, and turned their backs on the US real estate market. According to industry insiders, the sentiment is growing. In May, a group of Republicans in the US Congress reportedly intended to tighten visas for Chinese students and researchers. Tightening visa rules are among the major reasons Chinese investors aren’t buying US homes, according to US property agents.
“The difficulty of passing the US visa interview is rising, and it’s affecting Chinese investors’ investment in the country,” a Beijing-based US property agent working for 5i5j Property Agency told the Global Times on Monday.
“Even if you purchase the property for the purpose of investment, you still need a visa to take a look at it in person,” the agent said.
Before the China-US trade tension, the US was the first destination among Chinese investors, and 70 percent of clients bought the properties to rent, another Beijing-based agent said on condition of anonymity.
Chinese homebuyers were the largest group of foreign buyers in the US real estate market for six consecutive years till March 2018, according to the National Association of Realtors of the US. But in the remaining three quarters in 2018, investors from the Chinese mainland for the first time became net sellers in the US real estate market, according to Real Capital Analytics.
Yan Yuejin, research director at E-house China R&D Institute, told the Global Times on Tuesday that in recent years more and more Chinese investors had started to turn their attention to countries participating in the Belt and Road Initiative.
“I don’t think the capital outflow restrictions are the major reason for Chinese investors’ cooling attitude toward the US real estate market, because investment in other countries like Thailand is rising,” Yan said. Newspaper headline: US homes lose appeal amid row