Chinese Investing in California Real Estate?
Categories: Global Real Estate, Economy, Real Estate Investment
From Financial Times - Chinese Property Hunters to Raid US:
Chinese bargain hunters are preparing to descend on American cities such as Los Angeles and San Francisco, where homeowners have suffered some of the steepest price falls in the US.
SouFun, the biggest real estate website in China, is organising a trip next month to look at properties in California and possibly Nevada. Liu Jian, the company’s chief operating officer, said about 300 people had expressed interest in the idea in the three days since it was advertised, though the company would take only a small group on the first trip.
Have global investors given up on stocks and looking at which asset class seems to be hitting bottom first? A case can be made with US real estate - a transparent investment (compared to other countries like China) that seems now on the verge of being propped up by the Fed/Treasury's "low interest rate and kitchen sink" strategy to stabilize the housing markets.
Hey, they could end the housing slump with all their money!!
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A couple of things to note, Pat.
1. China does not allow for private ownership of land. They grant long (I think like 90 years?) leases, but you cannot own land in fee simple.
2. Chinese culture deeply values land ownership. It is probably the single biggest asset class of the investments of your typical Chinese (native or immigrant) family.
Combine the two factors, and it's easy to see why Chinese investors would be very, very tempted by U.S. real estate.
If I were a realtor in CA, NY, MA, or other areas with large Chinese populations, I would seriously think about reaching out to some companies in China for partnership.
-rsh
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