It's not uncommon to see large Chinese tour groups throughout the U.S. shopping for bargains in various malls throughout the country. But many wealthy Chinese are no longer limiting their purchases to designer souvenirs. They're looking for more sizeable investments.
According to the 2008 Merrill Lynch and Capgemini World Wealth Report, China is home to about 415,000 millionaires, and this number should continue to grow. As a result, many business investors are looking for places to invest their money. In the current economic climate U.S. real estate has become an increasingly popular choice.
Many groups of Chinese shoppers have been touring the U.S. looking at foreclosed properties or other real estate bargains. While there’s plenty of inexpensive real estate in China, properties in desirable parts of Shanghai, Beijing or other Chinese cities are often just as expensive as similar residences in major U.S. cities.
Since the Chinese real estate market hasn’t undergone the same dramatic drop as the U.S. market, Chinese buyers are eager to get good deals. Many of them prefer to pay in cash, making them desirable buyers for sellers who are in difficult financial situations.
For some purchasers, U.S. real estate is primarily a financial investment, but others are interested in buying homes for their young children, so they’d have a place to live if they end up attending an American university.
One 40-person real estate tour led by Soufun Holdings Ltd. features properties in places with strong university programs, including Boston, California, and New York. Of course, strong Chinese communities and places of Chinese interest are even more important, which probably explains the inclusion of Las Vegas in their list.
Even with the growing number of Chinese tour groups, it’s not likely that these new real estate investors will make a big dent in the housing market, but at least it’s a start.