April 24, 2018

Chinese Investors Unfazed—For Now

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Chinese Investors Unfazed—For Now

President Donald Trump has threatened to impose a tax on steel and aluminum from China and other countries. Both sides have threatened to impose tariffs on multiple products. In reaction, the stock market has been volatile. But will the trade disputes leave Chinese buyers skittish about U.S. real estate? 

“At this point, most Chinese buyers are cautiously optimistic,” Carrie Law, CEO of Juwai.com, a Chinese international real estate website, told RISMedia. “From all sides, you hear that this trade war is not likely to escalate to the point where it is a serious threat to international trade and relations. At this stage, most property investors seem to feel the trade war will amount to no more than a noisy argument between two friends who later will hug and make up.” 

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However, Law acknowledges that a persistent trade dispute between the two sides may cast doubts in consumers' minds that could then reduce demand for U.S. properties. “The long-term fear is counterbalanced for now by a short-term incentive to purchase before Sino-U.S. relations possibly get worse,” she says. 

Indeed, Law says Chinese buyer demand for U.S. real estate was up 26.2 percent in March month over month, based on buyer inquiries made through Juwai.com. 

In 2017, Chinese buyers made up $31.7 billion of U.S. real estate purchases made by international buyers, up from $12 billion in 2012, according to the National Association of REALTORS®’ Profile of International Activity in U.S. Residential Real Estate

Source: “Trade Concerns Unwarranted? Chinese Foreign Investment in Real Estate to Remain on Track,” RISMedia (April 10, 2018)