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Top 4 markets still in favour with Chinese buyers

By Juwai, 30 November 2015
us uk australia japan

Despite China’s economic tumult, Chinese buyers are still investing in overseas property.

Although some sectors and industries may be experiencing some trouble, consumer demand is still strong and growing.

In a recent interview with news.com.au, Dave Platter of Juwai.com share that “Retail sales are up 10.8 percent, Starbucks is opening one-and-a-half stores a day, Apple just doubled its operating income, IMAX sales per screen are up from $287,000 to $300,000 per quarter, and outbound tourism is at record levels.”

We look at the top four markets currently still popular with Chinese property investors.

 

Australia

Chinese buyer appetite for the land down under is still going strong, contrary to a recent Credit Suisse report, which projects Chinese buyer demand to abate by as much as 30% in the year till December.

The unrelenting upsurge in Chinese hunger for Australian real estate proves otherwise, mostly bolstered by the weak Aussie dollar against the Chinese yuan, and Australia’s stellar reputation as a safe haven for real estate investment.

According to CBRE, Chinese demand for outbound investment is prevalent, and Australia is “definitely one of the top destinations” and remains eminently attractive.1

Juwai data forecasts a significant growth spurt in Chinese property investors in the next five years – of which Australia stands to benefit greatly from.

A recent trend to take note of though, is the Chinese’ recent penchant for Melbourne properties over longtime favourite Sydney. The Juwai Purchasing Intent Index of Victoria and Melbourne grew by 74% and 92% respectively – a surge that is largely thanks to its substantial number of new residential developments.2

 

United States (US)

The American dream is still alive for Chinese, it seems. The US remains a top choice for Chinese property investors, with California, Florida, New York, Texas, and Washington reigning as the five favourite US states with Chinese buyers.3 However, Chinese homebuyers are also casting their eyes on other options.

Juwai data reveals St. Louis, Gainesville, Florida, and Seattle as the next rising hotspots to watch.

From first-rate education and medical services – the US ranks as the #1 medical destination for Chinese HNWIs – to stable returns and thriving Chinese communities, the US has much to entice Chinese property hunters.

Chinese also rank as part of the top five most prolific international homebuyers in 46 of 50 states in the US.3 Clearly, the Chinese – who spent US$28.6 billion on American real estate – plan to retain their spot as the largest group of foreign property investors in the US.

 

United Kingdom (UK)

China President Xi Jinping’s recent trip to the UK and the royal welcome he received there has done wonders for boosting Chinese interest and attention towards the UK, which has long been a perennial favourite for Chinese buyers.

As the #2 education hotspot for Chinese students – 2014 charted 87,895 Chinese students in Britain, 58,810 whom were newcomers4 – the UK is heavily favoured by Chinese investors due to its top-ranking universities, as well as for its stringent gun control laws that render it a safer country for Chinese students.4

Tack on the latest UK visa relaxation for Chinese tourists, and booming infrastructure project such as the HS2 Rail Project, and we’ve got a winner on our hands.

 

Japan

Chinese investor attention on Japan has been on a rise – the Juwai.com Purchasing Intent Index showed a 20x growth in interest by Chinese investors earlier this year.

Juwai data shows the top four cities most popular with Chinese buyers are Tokyo, Osaka, Kyoto, and Kobe.5

The Land of the Rising Sun’s allure stems from a medley of driving factors: its reputation with Chinese as a strong and safe economy5, the yen’s decline against the yuan6, and the upcoming 2020 Tokyo Olympics5, which promises steady returns on investment (ROI) in Tokyo.7

Japan’s popularity as a holiday haven is also a big motivation. Japan was the No. 1 travel destination for Chinese during the October Golden Week8, with Chinese visitors doubling to 400,000 Chinese tourists who spent over 100 billion yen (US$830 million) in those seven days.9

This popularity has even led to the birth of property and shopping tours exclusively tailored for Chinese property hunters, which is no surprise as Juwai research shows Chinese tend to purchase property in holiday destinations they love.

 

Where else are Chinese buyers looking at?

While the above destinations remain at the top, Chinese buyers are increasingly casting their eyes further to less-conventional property investment destinations.

Up-and-coming Mediterranean destinations on Chinese radar have shown rapidly growing purchasing intent, while Spain has snagged the most Chinese investors, followed by Portugal, Italy, Cyprus, and Greece.

However, our latest Juwai Purchasing Intent Index has revealed Cyprus to be the favourite investment destination in the Meds – Chinese investor intent in Cyprus surged 351% last year, particularly in Limassol and Paphos.

One thing’s for sure, Chinese buyers are still investing overseas. It’s just a matter of where.

 

 

Sources: 1. CBRE; 2. Juwai Purchasing Intent Index; 3. Juwai research; 4. Britain’s Higher Education Statistics Agency; 5. Juwai Purchasing Intent Index; 6. Dow Jones Newswire; 7. China Daily; 8. National Tourism Administration (NTA); 9. China Daily Asia