Chinese Investor Groups Hunting for Low Priced Housing in the U.S.
In a recent Chemically Green post on American foreclosed housing gaining a lot of interest in foreign investors, (mainly from the oil rich countries), now a new group of investors are coming to America to buy up our foreclosed housing.
China is the newest investor to stalk cheap American foreclosed housing.
Even though the Chinese economy is slowing down due to the U.S. recession, Chinese investors are here and they are not just looking.
Reporting from Shanghai — Caravans of cash-rich Chinese in Hummers and Lincoln Navigators have been weaving through American neighborhoods in recent months, looking for foreclosures and other bargain properties to buy.
With housing prices crashing in the U.S., home-buying trips to America are becoming one of the more popular tour group packages in China. New U.S. visa rules for Chinese tourists and a loosening of foreign investment policies by China have made it easier for people such as Zhao Hongjun of Beijing to go house hunting across the Pacific.
Chinese home-buying missions in the U.S. are part of a broader trend of individuals and businesses in China seeking greater investment opportunities abroad. Last week government and business officials from China’s southern Guangdong province arrived in Los Angeles to create a regional chamber office.
Certainly, a wave of Chinese bottom fishers won’t end the housing woes in Southern California, where by some measures the median price has sunk more than 40% since the spring and summer of 2007.
But it could help rev up sales in some places, including the UC Riverside area and the San Gabriel Valley, home to large Chinese American communities and mentioned by some potential buyers as places of interest.
The 48-year-old owner of a media company went on a two-week road trip through the U.S. last fall, visiting scenic sites and checking out properties from Los Angeles to New York. He’s been following the swoon in prices ever since, and next month he’s considering joining another prospecting group that is heading for San Francisco, Los Angeles and Las Vegas, three of the hardest-hit housing markets in the U.S. Zhao’s budget: $1 million.
“L.A. is not bad; a lot of Chinese live there,” he said, noting that he was interested in both apartments and houses.
The tours are a new twist on an old phenomenon.
Overseas Chinese have been buying Southern California properties for years. What’s different now is that they are starting to do it in large groups and quite openly.
“Before, it was kind of private, a quiet thing among friends,” said Jamie Lee, a Chinese American who runs the Los Angeles Convention and Visitors Bureau office in Beijing. “Now it’s full-blown. . . . It’s huge.” Some of these groups “are talking about going every two weeks.”
But home prices in the U.S. have fallen more sharply than in China, and many Chinese consider the American market highly alluring as a place to invest and live because of the United States’ developed economy.
The purchasing tours in the U.S. grew out of similar trips by well-heeled Chinese back home.
The Chinese do have a lot of cash to spend. The central government holds the biggest stockpile of foreign reserves in the world, nearly $2 trillion, most of it in dollars. A Boston Consulting Group estimates that there were more than 391,000 millionaire households in mainland China last year, up from 310,000 reported the previous year. Source: L.A. Times
Simply amazing, the U.S. will sell to anyone including a country that loves our money but hates our so called freedom. Just a few week ago, a leading Chinese dissident, Liu Xiaobo, was arrested over a freedom charter because he advocates freedom and free elections. What a trading partner.