Chinese Investors Buy $6.1 Billion Worth Of US Homes In Past 12 Months (2024)

FAQs

Chinese Investors Buy $6.1 Billion Worth Of US Homes In Past 12 Months? ›

Chinese Investors Buy $6.1 Billion Worth Of US Homes In Past 12 Months. For the first time in three years, activity from overseas real estate buyers has increased. During a time when the housing market is under incredible scrutiny and seeing astonishing prices, investors from China are gobbling up available homes.

Many Chinese and Hong Kong nationals may find this an intriguing option because of the relatively cheaper housing prices in the United States (compared to metro areas of other western countries) and the availability of coastal area properties in many country locations.

Chinese investors are among the top foreign purchasers of residential real estate, along with Canadians, according to the National Association of Realtors. Other states have had concerns over foreign ownership of land and have made efforts to regulate it.

China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture.

According to data reported by the PEW Trust and originally gathered by CoreLogic, as of 2022, investment companies own about one fourth of all single-family homes. Last year, investor purchases accounted for 22% of American homes sold. This is significantly down from the 80% number in 2020-2021, why is this?

Canadian investors lead this pack, by a long shot, with nearly 9.4 million acres of U.S. land — more acreage than 44 of the top 50 foreign landowners combined, according to the report. (These people own the most land in America.)

Highlights: Foreign Investment US Real Estate Statistics

From April 2020 to March 2021, investors from outside the United States bought 107,000 properties worth $54.4 billion in the United States. Foreign-born individuals make up 14.25 percent of the population in the country's 50 largest metros, on average.

How have Chinese and Canadian investments developed over time? The share of Chinese investors in the U.S. real estate market remained somewhat constant until 2018 when it hovered at around 15 percent, before dropping to 11 percent in 2019 and then six percent in 2021.

In play now in China, where around 70% of household wealth is in property, this phenomenon is weighing on the post-pandemic recovery of household consumption, which Chinese policymakers have vowed to make a more prominent driver of economic growth.

The US is a renter-friendly country with a high demand for rental properties. Therefore, you can easily find tenants for your investment property in the USA and generate good rental income. Rental yield is defined as the gross annual rental income as a percentage of the property purchase price.

How much of Manhattan is owned by China? ›

According to the U.S. Department of Agriculture's (USDA) latest report on foreign ownership of American land, from 2021, 146 Chinese investors held 383,935 acres—nearly double the 193,700 acres that comprise New York City.

The answer is yes, foreigners are allowed to purchase property in China! The essential requirement is that you have studied or worked in China for at least one year on a residence permit. Foreigners are allowed to only own one residential property for dwelling purposes.

Foreign investors are not allowed to buy land in China. The land in China belongs to the state and the collectives.

The company can build equity.

If the company has borrowed money to purchase the house, it can build equity over time, essentially increasing the percentage of the home it owns outright and can then borrow against later on.

Donald Bren. Donald Bren is one of the greatest real estate investors in American history. He is currently the wealthiest real estate investor in the country and has a net worth of $15.3 billion.

Many factors have influenced this unusual market, of course. But one that affects the housing shortage in particular is institutional real estate investment. Institutional investors purchased 13.2 percent of all properties sold in 2021, according to a 2022 report by the National Association of Realtors (NAR).

The nation's largest private landowners are the Emmerson family in California who own over 2.4 million acres. The bulk of that land is dedicated to timber in Northern California. But the most headline-worthy transaction of 2022 was the Four Sixes Ranch in Texas.

1. EMMERSON FAMILY. The nation's largest private landowners, California's Emmerson family, are a prime example of this trend. Through their Sierra Pacific Industries, the Emmersons increased their landholdings by more than 100 square miles to over 2.4 million acres.

Upon sale of real property, the foreign investor will be subject to FIRPTA withholding tax at the rate of 15% of the total sale price (not on gain realized from sale) subject to certain exceptions. FIRPTA tax must be withheld from the purchase price by the buyer and is treated as an advance payment of U.S. taxes.

What percent of US homes are owned by foreigners? ›

Foreign buyers living in the U.S. made up the lion's share of investors, buying $34.1 billion worth of U.S. homes — or 58% of the volume.

As seen in Table 2, when sorted by total land value, the top 10 countries for foreign investors are Canada, the Netherlands, Germany, Italy, the United Kingdom, Portugal, France, Japan, Sweden, and China.

Another way that Chinese home buyers are able to afford their down payments is via the country's Housing Provident Fund. This fund began when the country started privatizing urban housing as way to help residents afford to buy their homes.

Chinese investors have been lining up to buy properties in Canada, the US, New Zealand, Thailand, and Australia, majorly because these five countries have been hot markets for them.

California is the epicenter of Chinese residential investment in the U.S., with 34% of purchases in the state. Other significant hubs are New York, New Jersey, Florida and Texas. In Irvine, population 280,000, “there are 65,000 houses... and 21,000 of them are owned by Chinese.” Lu of Fidelity National says.

The United States is the richest country in the world with the highest GDP, as of 2021. China is the second richest country in the world with a $17.734 trillion GDP.

How much is rich in China? Millionaires are defined as individuals with personal wealth of over 10 million yuan, and super-rich are defined as individuals with personal wealth of 100 million yuan or above. One yuan equals approximately 0.16 U.S. dollars and 0.14 euros (as of April 2022).

The U.S. currently has the largest economy in the world by far with $23 trillion in 2021 GDP, according to the World Bank's data, while China has the second-largest GDP at $18 trillion and India the sixth-largest at $3 trillion.

In 2022, five countries (Canada, China, Mexico, India and the U.K.) accounted for 29% of purchases.

How many foreign homeowners are there in Canada? Data that tracks foreign buyers and owners in Canada are scarce and patchy. The Canadian Housing Statistics Program shows that non-residents only own about two to six per cent of Canadian residential properties in 2020.

Who are the foreign buyers of housing in the US? ›

Between April 2021 and March 2022, 38% of foreign buyers in California were from Asia, 15% were from Canada, 12% were from Latin America and 27% were undetermined, according to the report. Foreign buyers purchase 1.6% of all homes sold in the U.S., according to the report.

China Investment Corporation (CIC) has forked out $1.03 billion to purchase a 45 percent stake in a building in New York’s iconic Rockefeller Center, a deal which makes the Chinese sovereign wealth fund one of the biggest buyers of Manhattan real estate in 2016.

But the climax of this wave of purchases was surely the $846 million sale of a 51 percent stake in The Rockefeller Group – owner of Rockefeller Center, Radio City Music Hall and New York's dancing Rockettes – to the Mitsubishi Estate Company of Tokyo in October 1989.

According to Russian law, foreigners are usually allowed to purchase or rent property in Russia, but certain exceptions apply. Also, in order to be allowed to buy a property, the foreign citizen must hold a valid Russian resident permit.

The Chinese believe a home should be a balanced environment where the position of doors, windows and furnishings help the good energy to flow through unencumbered. Light and airy homes with little clutter appeal to most people so Feng Shui practices are often just good common sense.

Both the Constitution of the Russian Federation and the Civil Code of the Russian Federation uphold the right to own private property.

China owns and controls almost 192,000 acres of farmland right here in the United States. To be clear, it's not a huge percentage of our total farm acreage by any stretch. According to the FDA, there are more than 35 million acres of farmland in the U.S. which are owned by foreign investors.

There is no private “freehold” land ownership in China. All urban land in China is owned by the Chinese government and is commonly referred to as “state-owned land.” All rural and suburban land is owned by rural collectives (ie, local groups of farmers) and is commonly referred to as “collective land.”

How many homes does BlackRock own in the United States? ›

BLACKROCK AND SINGLE-FAMILY HOMES

Invitation Homes, for example, has approximately 80,000 homes for lease across the country and is the largest landlord for single-family homes in the United States (here) (here).

Invitation Homes is the largest single owner of single-family rental homes in the United States, managing more than 80,000 homes as of 2021.

Who owns BlackRock? BlackRock is not owned by a single individual or company. Instead, its shares are owned by a large number of individual and institutional investors. The biggest institutional shareholders such as The Vanguard Group and State Street are merely custodians of the stock for their clients.

The largest real estate company in the USA is Coldwell Banker. Founded in 1906, Coldwell Banker has over 100 years of experience buying and selling homes that they share with the people they work for. It has a total of 3000 offices and even exists in more than 49 countries.

Cross-Listing Lowers the Cost of Capital

A key benefit of cross-listing, and undoubtedly a major driver of the cross-listing premium, is the reduced cost of financing available to cross-listed firms. Companies pay less to raise money, whether by selling stock (equity) or debt.

Chinese buyers comprise one of the largest groups of foreign buyers of residential property in the United States. Historically, between 20,000 and 40,000 residential properties were bought by Chinese nationals, but in 2022, both the sales volume and percentage of all foreign-bought properties declined.