nationals became the largest foreign buyers of US homes last year as
they pour billions into American real estate, seeking safe offshore
assets, according to a new study.
A huge surge in Chinese buying of both residential and commercial real
estate last year took their five-year investment total to more than $110
billion, according to the study from the Asia Society and Rosen
The sheer size of that total has helped the real estate market recover
from the crash that began in 2006 and precipitated the 2008 economic
crisis, they said.
And despite a slowdown due to Beijing’s clampdown on capital outflows,
the figure for the second half of this decade is likely to double to
$218 billion, the study said.
"What makes China different and noteworthy is the combination of the
high volume of investment (and) the breadth of its participation across
all real estate categories," the study said. The authors of the study
said their numbers, based on public and real estate industry data,
understate the total. They necessarily miss purchases made by front
companies and trusts that don’t identify the sources of the funds.
While big deals, like the Anbang insurance group’s $2.0 billion purchase
of the Waldorf Astoria hotel in New York last year, and its failed $14
billion offer for the Starwood group in March, make headlines, the study
said Chinese buying of US homes far outpaces its investment in
commercial land and buildings.
Between 2010 and 2015, Chinese buyers put more than $17 billion into US
commercial real estate, with half of that spent last year alone.
But during the same period at least $93 billion went into US homes. And
in the 12 months to March 2015, the latest period for which relatively
comprehensive data could be gathered, home purchases totalled $28.5
That focus means they pay well above the average US home price: last
year, Chinese buyers paid on average about $832,000 per home in the
United States, compared to the average for all foreign purchases of
Most of the money in US homes, the study noted, is private wealth, not
"This familiarity of utilizing real estate as an investment or wealth
preservation tool is more prevalent in China and reflects the broader
comfort of purchasing second homes in the United States by Chinese
individuals and families," the study noted.
Since last year, there has also been the motivation to get money outside
China and into dollar assets amid worry about the continued fall in the
yuan, which was devalued slightly against the dollar in August.
The study says it expects a lot more commercial real estate buys in the
United States by Chinese companies.
Last month, Chinese conglomerate HNA announced it would buy the
1,400-hotel group Carlson Hotels, owner of the Radisson brand.
"Anbang is not the only firm looking at these assets. Other Chinese
entities were originally interested in acquiring Starwood in 2015 before
Marriott reached an initial deal, including Jin Jiang Hotel Group, which
had already acquired a European hotel chain in 2015, and CIC, the
sovereign wealth fund," the study said.