Reply
Regular Visitor
johndough
Posts: 2
Registered: ‎06-07-2012
0

All Cash Buyers - China?

[ Edited ]

 

I've been reading about new Chinese leader Xi Jinping and his intent to crackdown on corruption.  This has lead to massive cash outflows from China.

[http://finance.yahoo.com/news/corrupt-chinese-officials-racing-withdraw-053121605.html]

 

In China, luxury goods purchases are taking a nose dive.  Luxury homes are selling at a discount.  I wonder how much of that cash is going into the U.S real estate market?  My guess is that it's alot.

Visitor
MastermindGroup
Posts: 8
Registered: ‎02-18-2013
0

Re: All Cash Buyers - China?

Not far from where I live the entire block of high-end custom homes and lots were bought by 2 Chinese cash buyers! So yes, the Chinese, the Germans and hundreds of elites from the oil-rich Middle Eastern countries are scooping up CA, AZ, NV, TX, FL properties, both commercial and residential. The Germans are going after even the industrial warehouses, distribution centers and land.

 

Much of Central CA's commercial land where the propsed high-speed rail will run through has been a prime target for the Germans.

Trusted Contributor
Mortmain
Posts: 198
Registered: ‎10-29-2012
0

Re: All Cash Buyers - China?

[ Edited ]

They (Chinese) have been buying up RE for some time, and actually favor New York over LA. Apparently using family, business and other below the radar means to launder money out of China, where there are severe restrictions on expatriating funds. This is not restricted to the US, nor just the Chinese. The London property market is awash with foreign money. Central London values are equal to the aggregate of the rest of the UK excluding England. Paris is also very expensive, and you'd expect both Dubai and Spain to be receiving investor attention since their crashes. Currencies, lending and red tape shape where the money goes. The weak dollar makes some US RE look like a bargain if you're say Euro denominated. The Chinese traditionally are RE investors, many not trusting stock markets. Smart people. If you go to auction houses like Sothebys, Russians and Chinese are pretty busy there too.

Silver Contributor
troy-mclure
Posts: 443
Registered: ‎02-26-2010
0

Re: All Cash Buyers - China?


Mortmain wrote:

They (Chinese) have been buying up RE for some time, and actually favor New York over LA. Apparently using family, business and other below the radar means to launder money out of China, where there are severe restrictions on expatriating funds. This is not restricted to the US, nor just the Chinese. The London property market is awash with foreign money. Central London values are equal to the aggregate of the rest of the UK excluding England. Paris is also very expensive, and you'd expect both Dubai and Spain to be receiving investor attention since their crashes. Currencies, lending and red tape shape where the money goes. The weak dollar makes some US RE look like a bargain if you're say Euro denominated. The Chinese traditionally are RE investors, many not trusting stock markets. Smart people. If you go to auction houses like Sothebys, Russians and Chinese are pretty busy there too.


how do they determine value?

Regular Visitor
johndough
Posts: 2
Registered: ‎06-07-2012
0

Re: All Cash Buyers - China?

Hmmm, the EURUSD isn't that high.  I think it may be more speculation and CYA, than weak USD.  Economic outlook is grim over there...people are probably moving money out (at least that's what I would do).  There's probably a fair amount of corruption as well.

 

It will be interesting to see if foreign money can compensate for (eventual) increasing inventory and interest rates, and support current prices.  In the end, I think something has to give.

Gold Regular Contributor
sheriff
Posts: 2,345
Registered: ‎06-01-2012
0

Re: All Cash Buyers - China?


troy-mclure wrote:

Mortmain wrote:

They (Chinese) have been buying up RE for some time, and actually favor New York over LA. Apparently using family, business and other below the radar means to launder money out of China, where there are severe restrictions on expatriating funds. This is not restricted to the US, nor just the Chinese. The London property market is awash with foreign money. Central London values are equal to the aggregate of the rest of the UK excluding England. Paris is also very expensive, and you'd expect both Dubai and Spain to be receiving investor attention since their crashes. Currencies, lending and red tape shape where the money goes. The weak dollar makes some US RE look like a bargain if you're say Euro denominated. The Chinese traditionally are RE investors, many not trusting stock markets. Smart people. If you go to auction houses like Sothebys, Russians and Chinese are pretty busy there too.


how do they determine value?


Most have relatives here.  I am from the bay area and we have a high percentage of Chinese people buying here.  Some buy for themselves, other for relatives in China.  They usually don't buy without knowledge of the area.