Volatility in the Chinese economy has led to scores of wealthy individuals and corporations investing in the United States — particularly U.S. real estate. Within the past year, wealthy Chinese individuals bought three times more residential properties in the U.S.
than other foreign nationals, totaling more than $28 billion.1
In 2015, Chinese investors bought more than 33,000 homes2 at a median price of $542,084, favoring high-end markets in California and New York.3 Chinese companies also invested more than $4.4 billion in U.S. commercial real estate last year.4
One Chinese company, Anbang Insurance Group, purchased the JW Marriott Essex House Hotel near Central Park in Manhattan and Four Seasons hotels and resorts in the Silicon Valley area, Jackson Hole, Wyoming and Washington. In 2014, that same insurance company bought New York’s Waldorf Astoria hotel.5
In recent years, many people in China have amassed substantial wealth through the development of manufacturing, high tech and real estate companies and by investing in the stock market. Today, about 2 million Chinese households hold more than $1 million in assets, and it’s projected that by 2020, 4 million Chinese families will hold a combined $15 trillion in investable assets.6
Despite the Chinese government’s attempts to restrict currency flow into global capital markets, people seeking stable, long-term returns continue to pour money into U.S. investments. Currently, Chinese individuals are limited to investing no more than the equivalent of about $50,000 in foreign investments a year. However, many investors use trusts, partnerships, private equity funds and limited liability corporations to shield discovery, and about 71 percent of Chinese home buyers purchase U.S. properties with cash. Over the next five years, direct investment by the Chinese in the U.S. commercial and residential real estate markets is expected to reach $218 billion.7
1 Diana Olick. CNBC. July 6, 2016. "Foreign buyers flood US real estate, but buy cheaper homes." Accessed July 13, 2016.
2 Abby Schultz. Barron’s. May 20, 2016. "Chinese U.S. Real Estate Demand Tip of the Iceberg.”" Accessed July 13, 2016.
3 Diana Olick. CNBC. July 6, 2016. "Foreign buyers flood US real estate, but buy cheaper homes." Accessed July 13, 2016.
4 Kaitlin Ugolik. Institutional Investor. May 5, 2016. "China Gets Real About U.S. Real Estate.” Accessed July 13, 2016.
5 Amie Tsang. The New York Times. March 13, 2016. "Chinese Owner of Waldorf Astoria Bets Big on More U.S. Hotels.” Accessed July 13, 2016.
6 Allen T. Cheng. Institutional Investor. May 25, 2016. “UBS’s Hu Yifan Forsees Golden Age for Chinese Wealth Management.” Accessed July 13, 2016.
7 Abby Schultz. Barron’s. May 20, 2016. "Chinese U.S. Real Estate Demand Tip of the Iceberg.”" Accessed July 13, 2016.
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