US realty mar­ket ‘con­nects dots’ with China buy­ers

China Daily (Hong Kong) - - BUSINESS - By ZHANG YUWEI in New York yuweizhang@ chi­nadai­lyusa.com

It’s not just news that Chi­nese real es­tate de­vel­op­ers and prop­erty buy­ers are flood­ing into the United States — some­thing that’s cur­rently, to many Chi­nese, a bet­ter in­vest­ment than gold — it’s also the fact that this trend is bring­ing more than just cash into this mar­ket.

The in­creas­ing in­ter­est from the Chi­nese in US real es­tate is also cre­at­ing new busi­ness op­por­tu­ni­ties.

Ja­son Chen, chair­man of Shen­zhen World Union Properties Con­sul­tancy Co Ltd, a listed com­pany that pro­vides real es­tate con­sult­ing ser­vices in China, sees it as some­thing of a trend.

“So the idea is to team up with lo­cal agents in the US — even smaller ones (com­pared with the size of World Union) — to serve the grow­ing num­ber of Chi­nese buy­ers here,” said Chen, who re­cently at­tended a busi­ness fo­rum in New York to make new busi­ness con­nec­tions.

“That is the trend now,” said Chen, adding he has vis­ited New York three times this year and has a few agen­cies in mind.

World Union em­ploys some 15,000 peo­ple across China who bro­ker all kinds of properties. With a mar­ket share of 3 per­cent, it sold some 300,000 apart­ments across China last year and made prof­its that al­lowed him to look be­yond the home mar­ket, Chen said.

“We won’t re­ally op­er­ate solo here (in New York) and this won’t be money-mak­ing in the be­gin­ning, but we see this as a trend that is still de­vel­op­ing and we want to be part of it,” he said. “We just need to find a trust­wor­thy part­ner and feed them with our Chi­nese client source list.”

Chen’s plan is echoed by in­dus­try lead­ers in the US real es­tate mar­ket who call it a way to “bridge a gap”.

“In var­i­ous So Cal (South­ern Cal­i­for­nia) com­mu­ni­ties, we’ve ex­pe­ri­enced an up­ward trend in Chi­nese buy­ers pur­chas­ing our homes and the ma­jor­ity of those are not lo­cal Chi­nese buy­ers, but those com­ing from China,” said Brian Har­rel­son, a se­nior pro­ject man­ager in the South­ern Cal­i­for­nia di­vi­sion of­fice of Toll Broth­ers, a US lux­ury home builder.

As part of their busi­ness strat­egy to at­tract more Chi­nese buy­ers, Toll Broth­ers has teamed up with real­tors for joint events to pro­vide more buyer ser­vices, in­clud­ing re­im­burs­ing home­buy­ers’ in­ter­na­tional air­fares on their Fly-and-Buy pro­gram.

“There are a lot of agents in China, so we’re think­ing how we can em­power them by pro­vid­ing sup­port­ing in­for­ma­tion in Man­darin and de­vel­op­ing re­la­tion­ships be­tween the lo­cal and Chi­nese agents so they work to­gether,” said Har­rel­son.

“If we can bridge that gap, there will be more po­ten­tial buy­ers in the pool, rather than just what we see do­mes­ti­cally,” he said.

Chi­nese buy­ers ac­counted for 18 per­cent of the $ 68.2 bil­lion that for­eign­ers spent on res­i­den­tial properties in the US dur­ing the 12 months end­ing March 31, ac­cord­ing to the National As­so­ci­a­tion of Real­tors.

Chi­nese shop­pers are known for be­ing cash buy­ers and for buy­ing more ex­pen­sive homes than other for­eign buy­ers, spend­ing a me­dian price of $ 425,000, al­most dou­ble the me­dian of what other for­eign buy­ers pay.

In Cal­i­for­nia, the Chi­nese are the third-largest for­eign buy­ers of real es­tate, af­ter Mex­i­cans and Filipinos, ac­cord­ing to Real­tor.org.

“The grow­ing num­ber of in­ter­na­tional buy­ers in Los An­ge­les has been an on­go­ing trend,” said Sally Forster Jones, an agent with Cold­well Banker In­ter­na­tional in Los An­ge­les.

“More and more of the high-end deals are go­ing to in­ter­na­tional buy­ers, many of which are com­ing from China. This is a grow­ing mar­ket so it makes sense to do ev­ery­thing pos­si­ble to tap into the needs of this de­mo­graphic,” said Jones.

“I think the will­ing­ness of lo­cal and in­ter­na­tional real es­tate agen­cies to work to­gether can bring pos­i­tive re­sults,” said Jones. “We are liv­ing in a global mar­ket­place and real es­tate is a very col­lab­o­ra­tive busi­ness where con­nec­tions are ev­ery­thing.”

In New York, Chi­nese are sec­ond only to wealthy Do­mini­cans in pur­chas­ing homes.

“It’s clear that wealthy Chi­nese are look­ing for good in­vest­ments and NYC real es­tate is es­pe­cially ap­peal­ing to them, so it’s nice to have bro­kers work­ing to­gether to con­nect those dots, es­pe­cially when there are lan­guage bar­ri­ers,” said Todd Du­maresq, a mar­ket­ing man­ager with Toll Broth­ers City Liv­ing in New York.

In late June, US de­vel­oper Tish­man Speyer and China’s largest res­i­den­tial de­vel­oper China Vanke Co Ltd broke ground on a joint ven­ture to build 655 lux­ury con­do­mini­ums on the San Fran­cisco wa­ter­front.

Vanke is one of World Union’s clients in China, so, ac­cord­ing to Chen, it makes sense for them to fol­low their big client to the US.

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