The ir­re­sistible charm of own­ing prop­er­ties in other coun­tries

China Daily (USA) - - BUSINESS - By ZHU WENQIAN in Bei­jing zhuwen­qian@chi­

Chi­nese in­vestors are now among the big­gest prop­erty buy­ers in the United States, Canada, Aus­tralia and Ja­pan. Spooked by con­tin­u­ous Chi­nese cap­i­tal in­flows into lo­cal re­alty, some coun­tries have even raised for­eign own­er­ship thresh­olds or raised bar­ri­ers.

In July, Canada’s Bri­tish Columbia said it would levy an ex­tra 15 per­cent of prop­erty trans­fer tax on over­seas prop­erty own­ers in the Greater Van­cou­ver area.

So far, hous­ing prices at Van­cou­ver, where hous­ing prices rose the fastest glob­ally last year, dropped more than 20 per­cent in Au­gust. Only a few­clients of agen­cies closed the deals. Many agen­cies at­trib­uted the fall to the new­pol­icy.

“Some de­vel­oped coun­tries don’t like ex­ces­sive spec­u­la­tion in the prop­er­ty­mar­ket. The hugede­mand from Chi­nese in­vestors has led to a rapid rise in lo­cal prop­erty prices over­seas. It could cause mar­ket bub­bles and make the econ­omy un­sta­ble. Con­se­quently, it’s feared many lo­cal res­i­dents won’t be able to af­ford hous­ing,” said Guo Yi, mar­ket­ing di­rec­tor at Bei­jing-based Ya­hao Real Es­tate Sell­ing and Con­sult­ing So­lu­tion Agency.

“Be­sides, many Chi­nese peo­ple bought over­seas prop­er­ties purely for in­vest­ment pur­poses. They don’t stay there. This will cre­ate prob­lems like de­layed pay­ment of wa­ter and elec­tric­ity bills, and prop­erty man­age­ment fee.”

She also said over­seas prop­erty man­age­ment com­pa­nies are strict about prompt fee pay­ments.

Else­where, the Aus­tralian govern­ment said it will re­strict over­seas in­vestors from buy­ing pre­owned homes. For­eign­ers with short-term visas and own­ing prop­er­ties will have to sell such re­alty once the visa ex­pires.

In the United King­dom, the newly elected mayor of Lon­don, Sadiq Khan, warned that if a large num­ber of prop­er­ties in the cap­i­tal are bought by over­seas buy­ers for in­vest­ment pur­pose, the hous­ing short­age would per­sist even if thou­sands of new prop­er­ties are ev­ery year.

De­spite such mea­sures and warn­ings, Chi­nese in­vestors ap­pear un­stop­pable.

In the first half of this year, they bought over­seas prop­er­ties worth $16.1 bil­lion, ac­cord­ing to data from CBRE Group, a US com­mer­cial real es­tate ad­vi­sory firm.

Among cities, New York has be­come the most pop­u­lar in­vest­ment des­ti­na­tion for Asian in­vestors, re­plac­ing Lon­don. Among coun­tries, it is the US, at­tract­ing 52 per­cent of out­bound Asian cap­i­tal. built

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