Three reasons spur HNWIs’ purchases abroad

Children’s education, desire for a different kind of life postretirement and expectation of handsome returns on investment are the top three reasons why Chinese parents buy residential property overseas, according to a research report.

The report, entitled Overseas Property Needs of Chinese HNWIs 2017, was jointly published by the Global House Buyer and the Hurun Research Institute.

There were about 1.34 million high net-worth individuals, or HNWIs, across China as of May 2016, the report stated.

An HNWI is a person whose total asset value is 10 million yuan ($1.45 million) or more, and owns 2.3 apartments overseas on average.

The report stated that one of the key reasons why Chinese HNWIs buy properties overseas is to secure accommodation for their children bound for studies.

Another reason is the belief that properties can enable visiting parents to stay with their children during the academic semesters. If such stays coincide with their post-retirement life, so much the better as it would inject variety into their twilight years.

Expectation of stable returns on their investment, either through rent or resale, is also spurring property purchases abroad, especially in the vicinity of the campuses of prestigious universities.

Some 52 percent of Chinese HNWIs choose to buy properties in districts known to be home to reputable educational institutions.

“Buying properties overseas is popular among China’s rich. The trend will continue as more and more HNWIs realize the importance of having a balanced global asset portfolio,” said Zhou Yu, director of Savills China’s international residential sales.

“Property is one of the most acceptable and safe investments worldwide, and there are quite a few destinations with pretty good investment potential globally.”

About 46 percent of Chinese HNWIs said they will buy properties overseas in the future, and 55.5 percent said they will consider buying

WU CHANGCHUN / FOR CHINA DAILY People consult for rates of residential houses in Dubai at an overseas properties fair in Beijing. Many Chinese HNWIs plan to buy properties overseas in the future.