Yin Guohua heaved a sigh of relief last week as his plane touched down in Beijing after an 11-day tour of the US.
As a member of China’s first-ever delegation to shop for American real estate, Yin was prepared for hectic travel, endless showings, and pushy salesmen.
He was not prepared for the reporters. “Everywhere we went, there were cameras chasing us,” Yin said ruefully.
The novelty of Chinese shopping for American property guaranteed publicity for the 21-man delegation, which visited Los Angeles, San Francisco, Las Vegas, New York, and Boston. Another 19 delegates, most of them 35-50 years old, missed the trip because of visa problems.
Soufun.com, the real estate portal, organized the trip but did not announce the results.
Yin, a lawyer who had said he intended to buy a $1 million apartment in either Los Angeles or New York, also declined to say whether he had made a deal, but said the trip met his expectations. “In fact, we had a wider range of choices than we expected,” he said.
Howard Rosen, a senior manager at Grubb & Ellis, a New York-based property agency, said he does not think most Chinese individuals are qualified to purchase real property in the US “unless the money is here.”
Investors with deposits in Hong Kong may qualify, he said, but assets on the Chinese mainland will not satisfy US sellers, Rosen said.
In addition, foreign investment in US property requires a lengthy process, according to Rosen. Without “certainty of disclosure,” Chinese investors will not be taken seriously, he said.
Chen Yunfeng, secretary general of the China Real Estate Managers Association, said he also doubts that the time is right for Chinese to buy US investment property.
“Given the current US economy, there is no sign that the price of property will appreciate strongly in the short term,” said Chen. The price may even continue to slide if the crisis worsens, he said.
More buying trips are likely, however, as China’s new millionaires look for places to invest their wealth.
According to a report by the Boston Consulting Group, China had the world’s fifth-largest population of millionaires in 2008 with 391,000, up 20 percent from the previous year. “Wealthy Chinese are now considering to buy luxury properties when they come to the US, not only Rolex and Louis Vuitton bags”, said Pierre Gervois, CEO of China Elite Focus, a Shanghai based marketing and PR company specialized on rich Chinese.
The growing interest among Chinese in buying overseas properties is not focused solely on the US.
“There are more people coming to us, asking about the process of buying an overseas property,” said Rainer Schleif, a manager of Aimeilan Consulting (Beijing) Co Ltd, a company that deals mainly with Australian and Singaporean real estate.
Desire to emigrate and the sharp depreciation of the Australian dollar have piqued investors’ interest, Schleif said.