Chinese Cash Floods US Real Estate

User Forum Topic
Submitted by Jazzman on December 7, 2015 - 12:42pm

A fairly long NYT article that goes into a bit more detail than usual.

“The price of property in Beijing is very high, the stock market is crashing, and the real economy is not stable,” Mr. Du said of the environment in China. “The people here have some money, but they don’t have enough good ways to invest their money.”

So how much are the Chinese responsible for pushing up prices? 1%? 10%? And what happens when the tide turns and they move back to local RE, stocks, bonds?

“They are very rich. They don’t know how to spend their money,” said Mr. Tam...

Well that sounds like a sensible combination.

http://www.nytimes.com/2015/11/29/busine...

Submitted by Coronita on December 7, 2015 - 12:52pm.

Oh please... stop the blame game will you? Asian purchases account for 20-30% of new home purchases, and mostly at the higher end where most of you are not shopping.

Even in socal, the concentration of purchases are in the markets that are $1million+. If you want to blame foreign purchases maybe you should get your fvcking facts straight and blame canadians, since as a group, theyve are the largest foreign buyers even more than chibese. And their purchase price points are considerably lower, probably in the submarket where most of you would be looking.

Just another case of envyfluenza when some foreign buyer has more money than some domestic light skinned color person. Sheesh.

Submitted by bearishgurl on December 7, 2015 - 12:57pm.

flu wrote:
Oh please... stop the blame game will you? Asian purchases account for 20-30% of new home purchases, and mostly at the higher end where most of you are not shopping.

Even in socal, the concentration of purchases are in the markets that are $1million+. If you want to blame foreign purchases maybe you should get your fvcking facts straight and blame canadians, since as a group, theyve are the largest foreign buyers even more than chibese. And their purchase price points are considerably lower, probably in the submarket where most of you would be looking.

I saw that article yesterday. Chinese buyers are also scarfing up condos in CA coastal counties for all cash, as well. These properties aren't in the $1M+ range. They buy them for their kids future use to go to college. IIRC, there is a couple in that article on the tour bus who brought their 8 year-old with them and stated they wanted it for him to use for college. In the meantime, they'll lease it out.

I realize that US buyers with minor children really don't want to raise their own kids in condos but in some (expensive) sub-markets, that's all they can afford unless they want to add a lot of extra commute time to their workday.

Submitted by Coronita on December 7, 2015 - 1:07pm.

bearishgurl wrote:
flu wrote:
Oh please... stop the blame game will you? Asian purchases account for 20-30% of new home purchases, and mostly at the higher end where most of you are not shopping.

Even in socal, the concentration of purchases are in the markets that are $1million+. If you want to blame foreign purchases maybe you should get your fvcking facts straight and blame canadians, since as a group, theyve are the largest foreign buyers even more than chibese. And their purchase price points are considerably lower, probably in the submarket where most of you would be looking.

I saw that article yesterday. Chinese buyers are also scarfing up condos in CA coastal counties for all cash, as well. These properties aren't in the $1M+ range. They buy them for their kids future use to go to college. IIRC, there is a couple in that article on the tour bus who brought their 8 year-old with them and stated they wanted it for him to use for college. In the meantime, they'll lease it out.

I realize that US buyers with minor children really don't want to raise their own kids in condos but in some (expensive) sub-markets, that's all they can afford unless they want to add a lot of extra commute time to their workday.

Look at the percentage of Canadian buyers. Even so who the fvck cares..some has money, its legal, buy. Its called capitalism.

Maybe if more people would save and invest instead if spending their paycheck buying useless crap at Walmart, they too could afford a place to live.

Submitted by bearishgurl on December 7, 2015 - 1:06pm.

Here is the same article posted yesterday by FIH on the "Best Family Areas" thread. This one has a video link.

http://mobile.nytimes.com/2015/11/29/bus...

Submitted by bearishgurl on December 7, 2015 - 1:14pm.

flu wrote:
bearishgurl wrote:
flu wrote:
Oh please... stop the blame game will you? Asian purchases account for 20-30% of new home purchases, and mostly at the higher end where most of you are not shopping.

Even in socal, the concentration of purchases are in the markets that are $1million+. If you want to blame foreign purchases maybe you should get your fvcking facts straight and blame canadians, since as a group, theyve are the largest foreign buyers even more than chibese. And their purchase price points are considerably lower, probably in the submarket where most of you would be looking.

I saw that article yesterday. Chinese buyers are also scarfing up condos in CA coastal counties for all cash, as well. These properties aren't in the $1M+ range. They buy them for their kids future use to go to college. IIRC, there is a couple in that article on the tour bus who brought their 8 year-old with them and stated they wanted it for him to use for college. In the meantime, they'll lease it out.

I realize that US buyers with minor children really don't want to raise their own kids in condos but in some (expensive) sub-markets, that's all they can afford unless they want to add a lot of extra commute time to their workday.

Look at the percentage of Canadian buyers. Even so who the fvck cares..some has money, its legal, buy. Its called capitalism.

I understand. I believe you. I honestly don't care because the type of properties the Chinese buyer is attracted to do not generally interest me. So the fact that they're buying every listing they like in coastal counties which is not nailed down (and immediately contracting them with local property mgrs) doesn't bother me in the least.

In the SGV, this started happening en masse in early 2009, except that it was Chinese, Taiwanese and Vietnamese buyers (all cash). This subset of mostly prospective small business owners (who already had relatives settled in the area clueing them in that a RE "free-for-all" was going on there at the time) didn't buy new homes/condos (cuz there aren't any there) and didn't pay $1M for 95% of those properties.

Some of them bought 4-6 (distressed) units at once in ONE condo complex.

You're right, flu. It's capitalism at work and survival of the fittest.

Submitted by FlyerInHi on December 7, 2015 - 2:39pm.

We live in a globalized world.

In Chinese, America translates as "beautiful country".
There are thousands of Asian business people who have legit money and they all want an American education for their kids. That want what they call "wall street English" (it's advertised on bill boards everywhere. British English is a little anachronistic and England is cold (plus only the top universities are widely known). Australia has a bad reputation as a diploma mill. American universities are the best if only to learn English and go back to work for dad's company. It's the status factor.

Lots of foreign investors in hotels to qualify for eb5.
It's really a wonderful deal. Assuming your principal does not dimisnish and you earn a little return, it's better than leaving your money in the bank + you get a green card for you and your family.

http://www.forbes.com/sites/muhammadcohe...

Submitted by FlyerInHi on December 7, 2015 - 2:45pm.

True that Canadians are the biggest buyers. They are Americans so it's very familiar to them. Plus they don't need visas and can stay here 6 months at a time. they have special status and can open bank accounts without withholding with their Canadian tax ID.

Submitted by The-Shoveler on December 7, 2015 - 2:53pm.

Eastvale CA and Cornoa CA,

These are really the two new hot spots for foreign Asian buyers in SoCal.

Follow the ranch 99

The Rich ones will be found in San Gabriel or Irvine however or Pasadena and Arcadia.

I have not seen them buy condos really they tend to like Big new homes.

Submitted by spdrun on December 7, 2015 - 2:47pm.

Good thing is that Canadian purchasing power just got cut by 25-30% owing to the low price of oil and collapse of their dollar. Hopefully this, plus higher rates, will have a corrective effect in markets where Canadians like to buy.

Submitted by poorgradstudent on December 7, 2015 - 2:50pm.

flu wrote:

Look at the percentage of Canadian buyers. Even so who the fvck cares..some has money, its legal, buy. Its called capitalism.

Maybe if more people would save and invest instead if spending their paycheck buying useless crap at Walmart, they too could afford a place to live.

*hands flu a Snickers*

As for "who cares", it's pretty relevant as to answering part of the question of "Why is demand steady even as prices keep rising?". 20-30% is far from trivial. Also, Chinese demand is likely to fluctuate a lot more than Canadian demand. Yes, if oil prices skyrocket again the Canadian Dollar may gain ground on the US dollar and tip the scales, but Canadian appetites are a lot more steady and stable than Chinese.

Submitted by bearishgurl on December 7, 2015 - 3:02pm.

I wonder how much longer new exurban TX "mcmansion subdivisions" will remain relatively cheap, now that the Chinese buyer is interested. Nearly all of them seem to be built around some kind of a manmade lake or pond, lol ....

There are a lot of good colleges in TX, as well and I'm sure that is attractive to the Chinese buyer.

Submitted by FlyerInHi on December 7, 2015 - 3:12pm.

bearishgurl wrote:
I wonder how much longer new exurban TX "mcmansion subdivisions" will remain relatively cheap, now that the Chinese buyer is interested. Nearly all of them seem to be built around some kind of a manmade lake or pond, lol ....

There are a lot of good colleges in TX, as well and I'm sure that is attractive to the Chinese buyer.

Feng shui principles highly favor water features.
Dallas and Houston are big. If I were starting from nothing, it's go there. Pay cash for a 1 bedroom condo and then move on up.

It's a little redneck (ok, not a little, very much so) away from the big cities, but that's the price for lots of land.

Submitted by bearishgurl on December 7, 2015 - 3:14pm.

FlyerInHi wrote:
bearishgurl wrote:
I wonder how much longer new exurban TX "mcmansion subdivisions" will remain relatively cheap, now that the Chinese buyer is interested. Nearly all of them seem to be built around some kind of a manmade lake or pond, lol ....

There are a lot of good colleges in TX, as well and I'm sure that is attractive to the Chinese buyer.

Feng shui principles highly favor water features.
Dallas and Houston are big. If I were starting from nothing, it's go there. Pay cash for a 1 bedroom condo and then move on up.

It's a little redneck away from the big cities, but that's the price for lots of land.

Geographically, Dallas and Houston Metro areas are HUGE! The population in those areas are less than major CA cities because the density there is much lower. They're still BIG cities, though, with sophisticated freeway systems. Their highways are in much better shape than Cali's, as well.

Submitted by spdrun on December 7, 2015 - 3:18pm.

I'd argue that virtually everywhere can be "redneck" outside of the big cities -- ever been to parts of upstate New York, western Mass., or southern NJ?

Rumor has is that parts of upstate NY even have active Klan :( See below, have to give the guy points for creative Sci Fi storytelling...

http://nypost.com/2015/08/18/kkk-member-...

'ALBANY, N.Y. —A Ku Klux Klan member conspired to use a remote-controlled X-ray device hidden in a truck, which he called “Hiroshima on a light switch,” as a weapon of mass destruction to harm Muslims and President Barack Obama, a prosecutor told jurors on Monday.'

Submitted by FlyerInHi on December 7, 2015 - 3:14pm.

spdrun wrote:
Good thing is that Canadian purchasing power just got cut by 25-30% owing to the low price of oil and collapse of their dollar. Hopefully this, plus higher rates, will have a corrective effect in markets where Canadians like to buy.

My Canadian friends/acquaintances bought at the low. They want to sell and take the money home, but they don't really want to pay US taxes. So there're stuck.

Submitted by FlyerInHi on December 7, 2015 - 3:19pm.

spdrun wrote:
I'd argue that virtually everywhere can be "redneck" outside of the big cities -- ever been to parts of upstate New York, western Mass., or southern NJ?

Don't know why but I have a dislike for New Jersey and don't really want to explore. I don't really see the garden state. But upstate NY along the Hudson River is quaint -- West Point, Hyde Park, CIA (culinary institute).

Submitted by The-Shoveler on December 7, 2015 - 3:20pm.

The Canadians I know (mostly from the Northeast parts, Ottawa etc..).

They want to retire out of the snow, they are not rich (well maybe one is) so they look for more affordable warm areas.

Submitted by spdrun on December 7, 2015 - 3:22pm.

NJ has many gorgeous parts outside of what you see from Rte. 1/the Turnpike. West Point isn't really upstate -- it's 50 miles north of NYC. Roughly the same distance as Camp Pendleton to the SD airport.

Hyde Park/CIA is getting there, though it's still only about 25% of the way from the city to the Canadian border.

Submitted by FlyerInHi on December 7, 2015 - 3:25pm.

Another thing to consider is that, unlike Canadians, Asian buyers, especially the part time residents, don't really understand very high property taxes and HOA. The rich won't have a problem, the middle class who rode the property boom might get tired of paying a middle class salary (for them) in annual maintenance costs.

Submitted by FlyerInHi on December 7, 2015 - 3:58pm.

The-Shoveler wrote:
Eastvale CA and Cornoa CA,

These are really the two new hot spots for foreign Asian buyers in SoCal.

Follow the ranch 99

The Rich ones will be found in San Gabriel or Irvine however or Pasadena and Arcadia.

I have not seen them buy condos really they tend to like Big new homes.

Follow the 99 is funny. I think the HMart is better. The HMart center in Irvine is the shit to hang out. So many restaurants. Lots of nice cars and few parking spaces.

Irvine is really the ultimate city for Asians. New, clean, master planned, south coast plaza, UCI, and the high school. There is somewhat of skyline of tall buildings. The perfect compromise of the city and suburb.

San Diego is getting there... But we're provincial.

Submitted by The-Shoveler on December 7, 2015 - 3:58pm.

FlyerInHi wrote:
Another thing to consider is that, unlike Canadians, Asian buyers, especially the part time residents, don't really understand very high property taxes and HOA. The rich won't have a problem, the middle class who rode the property boom might get tired of paying a middle class salary (for them) in annual maintenance costs.

I would agree with this, time will tell how that plays out. They do understand HOA's with condos but the High MR and HOA's really throw them after they buy new SFH, but they are learning fast.

Submitted by The-Shoveler on December 7, 2015 - 4:15pm.

Yea EastVale really threw me the first time I heard about it I was thinking WTF LOL.

Corona seemed a lot more logical as it's just down the freeway from UCR and Rowland Heights the other way.

Submitted by flyer on December 7, 2015 - 4:44pm.

Makes you very glad you scooped up property in the golden state before the world discovered it.

Submitted by Coronita on December 7, 2015 - 4:49pm.

poorgradstudent wrote:
flu wrote:

Look at the percentage of Canadian buyers. Even so who the fvck cares..some has money, its legal, buy. Its called capitalism.

Maybe if more people would save and invest instead if spending their paycheck buying useless crap at Walmart, they too could afford a place to live.

*hands flu a Snickers*

As for "who cares", it's pretty relevant as to answering part of the question of "Why is demand steady even as prices keep rising?". 20-30% is far from trivial. Also, Chinese demand is likely to fluctuate a lot more than Canadian demand. Yes, if oil prices skyrocket again the Canadian Dollar may gain ground on the US dollar and tip the scales, but Canadian appetites are a lot more steady and stable than Chinese.

I would say a good part of the purchases aren't strictly investments but insurance to escape possible persecution when/if the government goes after the wealthy. Similar thing happened in Vancouver BC with folks from hong Kong. Only this thing, the scale of the wealthy is bigger.

Submitted by Jazzman on December 7, 2015 - 5:32pm.

flu wrote:
Oh please... stop the blame game will you? Asian purchases account for 20-30% of new home purchases, and mostly at the higher end where most of you are not shopping.

Even in socal, the concentration of purchases are in the markets that are $1million+. If you want to blame foreign purchases maybe you should get your fvcking facts straight and blame canadians, since as a group, theyve are the largest foreign buyers even more than chibese. And their purchase price points are considerably lower, probably in the submarket where most of you would be looking.

Just another case of envyfluenza when some foreign buyer has more money than some domestic light skinned color person. Sheesh.

What blame game? Nobody is blaming anyone. What is interesting is why is happening, not that it is happening. So read the "fvcking" article before you blame the blamers.

Submitted by Jazzman on December 7, 2015 - 5:36pm.

FlyerInHi wrote:
We live in a globalized world.

In Chinese, America translates as "beautiful country".
There are thousands of Asian business people who have legit money and they all want an American education for their kids. That want what they call "wall street English" (it's advertised on bill boards everywhere. British English is a little anachronistic and England is cold (plus only the top universities are widely known). Australia has a bad reputation as a diploma mill. American universities are the best if only to learn English and go back to work for dad's company. It's the status factor.

Lots of foreign investors in hotels to qualify for eb5.
It's really a wonderful deal. Assuming your principal does not dimisnish and you earn a little return, it's better than leaving your money in the bank + you get a green card for you and your family.

http://www.forbes.com/sites/muhammadcohen/2014/10/22/baccarat-to-eb-5-asian-money-bankrolls-las-vegas-revival/

Crap, bollocks, rubbish and nonsense. What a load of old cods wallop. You really think Asians prefer CA. You are so full of shit is embarrassing. What an idiot. GO FVCK YOURSELF!!!!!

Submitted by spdrun on December 7, 2015 - 5:41pm.

^^^

Sacred mierda -- who pee'd in your wheaties this morning?

Submitted by bearishgurl on December 7, 2015 - 5:45pm.

When it comes to housing, I think Asians just prefer "new" and "big" if they can get it. And having an existing Asian population (and infrastructure) already there and good colleges nearby doesn't hurt.

I don't think they care whether its on or near the ocean or not. Consider the inland heavily polluted and unzoned h@ll (mixed with comm'l and mfg) that they're coming from. Anyplace looks and smells better than that ... and having the oppty to purchase *new* housing is a bonus!

Submitted by ltsddd on December 7, 2015 - 5:55pm.

FlyerInHi wrote:

http://www.forbes.com/sites/muhammadcohen/2014/10/22/baccarat-to-eb-5-asian-money-bankrolls-las-vegas-revival/

The author of the article is quite clueless. The casinos, both in vegas and macau, have been taking a beating since early 2014. So, I am not sure what kind of "revival" he's talking about. The "corruption" crackdowns pursued by the chinese govt had a lot to do with it. As for baccarat, that game has been popular in vegas for as long as....when asians first showed up. The question is if this corruption crackdown is to continue, what kind of affect does it have on the real estate buying by the chinese?

Submitted by FlyerInHi on December 7, 2015 - 6:22pm.

Revival in terms is the number of visitors, and new building.
Vegas is back to peak in terms of total tourist spending. All hotels now charge a mandatory resort fee because they can (there was a pause after the recession).

The lucky dragon is being built and so is Resort world.

Try to find a cheap hotel room on the weekend. You can't.

Real estate values are still well below nominal peak but one of the best performing markets, trough to current. Lots of new construction because there's lots of land and that's good for the economy (high prices with little construction is good for confidence of existing homeowners, but not good for the economy).

As for the china factor, I'm with shoveler. Follow the 99. There a 99 and a Chinese radio station (which I've never heard in San Diego).

BTW, you can get an eb5 by investing in a Vegas hotel. Freedom of movement allows you to live anywhere in the Union.

Today I went to another Chinese owned supply company. They had white Quartz for $220 for a 2x9 slab. That's cheaper than Formica at Home Depot. Lots of nice materials that you see in primo hotels. A designer's dream at middle-middle class prices.
This company has China prominently in its name. Doesn't seem to turn off anyone.
http://www.amcnti.com

Macau is another story.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.