In recent years, international realty investments, especially from Chinese buyers, have become a major force in global real estate markets like the US, UK, Australia and Canada. However, various capital control policies imposed by the Chinese government did have certain restrictive effects. But generally these controls only had short-term impacts. With the huge capital demand, international investors’ ability to maneuver capital across borders is outstanding. There are always alternative channels and loopholes in the control policies that buyers actively look for and exploit. Therefore, the huge appetite from Chinese buyers for international realty investments has not diminished much.
Chinese buyers remain top foreign real estate investors in major markets
According to statistics, in the recent 12 months, Chinese buyers spent $31.7 billion acquiring residential real estate in the US, remaining the top foreign buyer group. In Australia, Chinese buyers account for approximately 90% of all foreign real estate purchases. Many wealthy Chinese have already moved their capital offshore earlier, so they can continue investing despite tightening control policies. At the high end market segments, these buyers are upgrading their properties by re-entering the markets.
Recent capital control policies did exhibit certain restrictive effects
However, some real estate brokers dealing with lower priced properties do feel stronger impacts from the intensified capital control policies implemented in early 2017. For instance, in California, sales from Chinese buyers dropped 50% in the first half of 2017. But historically, these declines tend to be transient, especially for affluent investors who are nimble with moving capital across borders.
Chinese buyers actively look for loopholes in control policies
Many buyers barred from directly wiring large sums overseas are now seeking mortgages in foreign markets. Others borrow from Chinese families already settled abroad. There are always alternative channels Chinese buyers actively look for, demonstrating the enormous appetite and persistence in pursuing international realty assets.
Despite restrictive capital control policies, owing to the vast capital demand, Chinese buyers’ maneuvering ability combined with exploitation of loopholes have maintained their strength in international realty markets.