Chinese investment in U.S. real estate totaled $110 billion over the last five years, with a record $36.6 billion spent in 2015, according to a new report.
“Breaking Ground: Chinese Investment in U.S. Real Estate,” released jointly by Asia Society and Rosen Consulting Firm, is considered the first comprehensive report on Chinese property investment in the U.S.
“What surprised me most is the speed of Chinese investment growth, but also the breadth of asset types and geographical locations,” says Arthur Margon, a partner with Rosen Consulting Group and the lead author of the report.
Chinese investment is concentrated in residential buildings. From 2010 to 2015, the cumulative value of Chinese investment in residential U.S. real estate reached $93 billion, while $17.1 billion went to U.S. commercial real estate.
Below are some highlights from the report:
Residential property. Between 2010 and 2015, Chinese buyers spent at least $93 billion on U.S. homes. Spending rose at an annual rate of 20%, and China has replaced Canada as the number one foreign investor.
Development. By the end of 2015, Chinese-funded projects under construction or planned in the U.S. totaled at least $15 billion.
Loans. Chinese banks have amassed at least $8 billion in loans for U.S. projects. Since major banks in the U.S. had tightened loans for new construction projects in recent years, Chinese banks have been pumping necessary funds into the field.
Geographical locations. In the housing market, California and New York take up 35% and 7% of all transactions, respectively.
The trend. China's policy of controlling outflow of capital as well as economic uncertainties will have an impact on U.S. real estate investment in the short term, but according to the report, Chinese investment in U.S. real estate is predicted to increase to $218 billion between 2016 and 2020.
Source: Mansionglobal.com Photo: Mansionglobal.com