Property investors ‘to return to Asia’
Chinese real-estate investors are losing interest in the United States as their concern over yuan depreciation eases and questions swirl around President Donald Trump’s stance on protectionism.
That’s the view of Andrew Haskins, executive director of Asia research and advisory services at Colliers International, who expects Chinese capital to return to Asia as investors pull out of America.
“The bulk of yuan depreciation has probably already happened, and if that’ the case there is less incentive for Chinese investors to place money in US dollar-denominated assets,” said Haskins in an interview.
After declining 13 per cent against the greenback over the past two years, the yuan has gained almost one per cent this year.
Political concerns “may also slow the pace” of Chinese investment in the US, especially if the new administration translated protectionist rhetoric into reality, he said.
Asian property investment in the US surged to a peak of US$33 billion (RM146.8 billion) in 2015, representing 51 per cent of aggregate investment outside Asia that year, according to Haskins, who cited Real Capital Analytics data supplemented by Colliers calculations.
The figure fell by 12 per cent to US$29.1 billion last year, of which Chinese capital accounted for 43 per cent, he said.
It was “no coincidence” that the popularity of the US surged over the years when the yuan was depreciating steadily against the US dollar, he said.
More significant, he noted, is a pick-up in intra-regional real estate capital flows, which stood at around US$70 billion last year.
While the portion of China’s investment within Asia — 17.4 per cent last year — was “not yet dominant”, mainland Chinese investment in foreign property would be high and “increasingly directed towards Asian rather than non-Asian markets”, said Haskins, without specifying any country in particular.
“Chinese investors to some extent see Hong Kong as a proxy for the US due to an explicit currency peg.”
He also noted that Hong Kongdollar denominated assets would be less appealing as the yuan stabilises.