As someone who has spent half of her life in Shanghai and half in New York, both cities are home to me. Being in real estate, I find myself re-connected to the place I was born and raised, in a much deeper way than during the 12 years I was in finance. Now I travel more frequently to China to talk and listen, I hear many voices from all walks of life. During my latest trip to Shanghai in August, I did 2 presentations about buying New York properties: one to my own clients and their friends, and one to clients invited by private wealth managers of a large local bank. Here is what I learned.
According to the NAR, home purchasing by foreign nationals accounts for 7.5% of the total US volume. In 2016 this percentage is lower than 2015 for the first time, after having risen for quite a few years. Chinese buying accounts for 26% of the 7.5%. 2016 is also the first time in a while that the Chinese share decreases – albeit by a small 1%. From my seat, I am fielding the most amount of inquiries from China since starting in the business. 2016 is different from the past few years, in that it is now much harder to move money out of China. Consequently, the pace of Chinese buying has slowed. However, this unexpected move by the government also creates fear for future uncertainty. A couple of clients who were on the fence about buying overseas, are now nudged into action by this fear. The overall demand is stronger for 2 reasons: 1. Perceived further depreciation of RMB and 2. Fear for uncertainty. Another changing trend worth noting is that versus a couple of years ago, people from the big cities in China are becoming more comfortable spending 1-3mm USD for an NYC property. People have become more informed and comfortable with the concept of owning property in a faraway land and are treating an NYC property as an important asset allocation for their wealth.