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How to sell property to Chinese buyers
By Juwai, 11 March 2020
Chinese buyers are now the fastest growing segment of real estate buyers globally as they seek out destinations that offer an attractive way of life, immigrant investment and educational opportunities.
However, cross-border property buying is often a time-consuming process, compared to a domestic purchase. For Chinese buyers, transacting a sale of an overseas property takes a much longer time due to several factors. These include language barrier, lack of and restriction of information (most Western websites such as Google, Instagram, Facebook, YouTube are not available), stricter capital controls from the government making it much more difficult to transfer money and regulations and rules from certain countries regarding foreign buyers.
As such, it's important to adopt a long-term plan for the China market and it is important to have a very thorough understanding of buyers' buying habits. So how does a developer or agent that's not based in China reach Chinese customers and learn what they are looking for?
Here are 11 tips to sell property to Chinese buyers.
1. Different types of Chinese buyers
Firstly, it is important to understand that there are different types of Chinese buyers:
- Type One: Mainland Chinese buyers who are currently located in Mainland China but are looking to purchase property overseas.
- Type Two: Chinese citizens currently living overseas who are looking for a property in another international country (for example, Chinese citizen living in the US but looking for a property in Australia).
- Type Three: Domestic Chinese buyers living outside of China who are looking for property in their current country of residence.
These three types of buyers have different needs and wants. Sellers should do well to take note of them. After you have identified which category your prospective Chinese customer falls under, here are a few tips on how to better sell to them.
2. Digital employee
China is without doubt a very digital-centric country. The number of internet users in China hit 854 million as of June 2019, with a penetration rate of 61.2 percent.1 The entire investor ecosystem centers on online activities. This sets the China market apart from the rest of the world where offline activities sometimes take precedence.
Statistics from Juwai.com show:
- 96% of Chinese HNWIs use mobile apps for financial transactions and information.
- 847 million mobile internet users in China.
- 91% of Chinese get online via mobile devices.
Social media, as such, is essential in China, so set up a WeChat official account as soon as possible and familiarize yourself with the workings of this app. This ensures that you can consistently farm prospective buyers and you can also work with a Chinese concierge team to do regular marketing email and follow up calls. Start posting periodic updates about the property, even if it's under renovation, and keep viewers informed about developments in the neighborhood such as new roads, highways, shopping centers, etc. Be as pro-active as possible online so that you can continue to engage with Chinese consumers and keep your leads warm.
3. Feng Shui
Many Chinese believe in feng shui - a Chinese traditional practice which claims to use energy forces to harmonize individuals with their surrounding environment - when it comes to buying property. Feng shui “rules” look at the positioning of the house, layout, street numbers, etc. For example, if the land is raised slightly to the rear of the house, it represents protection, or an unhindered space leading to the front door means good energy can gather and flow through to nourish the home and family.
Whilst many feng shui factors can be altered, feng shui dos and don'ts have been known to make or break a sale. Don't hesitate to point out positive feng shui elements in your marketing collateral while veering away from promoting any negative ones.
The Chinese also believe in numerology. Numbers play a significant role in their decision making when purchasing a home. The numbers 6, 8 and 9 are considered lucky in Chinese culture whilst the number 4 is considered terribly unlucky because the pronunciation of the word 'four' in Mandarin sounds way too close for comfort to the word for 'death'. In real estate, the more lucky numbers appear in a house address, floor level or price, the better it is. There are many stories about agents and developers who have been able to make a quick sale simply because they are savvy enough to change the house's street address number - for instance, from 64 to 66.
Chinese when buying overseas are looking for a safe place to call home for years to come. The security of a long-term or freehold lease is something many Chinese buyers dream of. They covet a place of their own where they can raise their family and invest for future generations and as such, destinations that offer residency are always a huge draw.
Education of offspring ranks high in most Chinese families as they believe it will lead to a prosperous future for their family. Properties that are located close to well-respected high schools or universities are sought after by Chinese. If properties on your list are near established educational centers, promote them prominently in your pitch to Chinese foreign buyers.
7. Return on Investment
Chinese buyers who are investors would like assurances that they can rent out their properties if they are not living in them. To maximize the appeal of a property, you need to be able to persuade the buyer of the rental yield on the property or provide a positive outlook where property prices are set to increase in the future. Like everybody else, the Chinese would want a favorable investment return before they commit to purchasing a property.
Status and “face” are something Chinese strive for. Appearing successful and wealthy to their peers enhances their reputation; thus, buying an overseas property in a well-known or prestigious location rachets up their social rankings. When formulating your pitch, be sure to reference the local landmarks, history or past celebrity owners and other success stories that could lend weight as to why the property is worth buying.
Chinese are big customers for schemes selling foreign residency. Getting a passport or long-term residents' visa in a foreign country would make it easier for them to live, work and educate their children in their new home. The right to reside in a foreign country is one of the key factors a Chinese buyer considers when looking for property overseas. Hence if you could offer additional services or have partners that specialize in the immigration sector working with you, you are more likely to draw Chinese buyers.
One prime motivation for Chinese heading overseas is a better-quality lifestyle than they currently have in China. This presents significant opportunities for the realtors as it allows you to sell “bonus features” of a property such as a garden, pool, storage, indoor garage and gym, or open plan living spaces which would be much more expensive in China than it is abroad. Besides physical attributes of the property, positive environmental aspects - clean air, abundance of nature, verdant landscape - are added plus points that could win over a Chinese buyer.
Not all Chinese buyers choose to live permanently in the property they purchase. Those who invest in a second or holiday home will most likely visit it whenever possible with ease. Highlighting transport links such as direct flights or the proximity to international airports when promoting your listings will assure buyers that they can travel easily to and fro to their new home.
Whilst these are some of the main factors buyers from China consider, not all buyers are the same. Chinese cross-border buyers too have different tastes, criteria and perspectives when it comes to viewing and evaluating potential properties. So the more you understand their needs and motivations, the more likely you are able to close the deal.
Sources: 1. Xinghuanet: China has 854 mln internet users: report
Juwai.com has a wealth of information about dealing with Chinese buyers, including…
1. 6 tips on how to engage Chinese property buyers
2. How to convert your sales lead into a deal
3. How best to reach a Chinese buyer after receiving a sales lead
3. How feng shui can help close a deal.
4. How Chinese travel can impact on where they choose to buy their overseas property
5. Which are the top 10 global picks for Chinese buyers when it comes to buying a property