Chinese buyers return to US property market – but this time they want a home, not an investment

That represents a big shift from a decade ago, when the main purpose was investment.

Property agents predicted the upwards trend will continue, with an influx of additional Chinese capital flowing into the market.

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“Inquiries from Chinese buyers climbed 52 per cent in the first quarter, so it’s fair to say a lot of pent-up demand is finding its way into the market now the borders are open,” said Kashif Ansari, co-founder and CEO of Malaysia-based Juwai IQI, a property technology company.

“For all but three months of the year covered by the report, China was locked down with closed borders, yet Chinese buyers still accounted for one fourth of the US$53.3 billion spent by foreign buyers on a US home.”

Chinese buying has rapidly rebounded from pandemic-era lows, but it remains to be seen whether it will bounce back to US$30 billion or so that was spent in 2017 and 2018, Ansari said.

Juwai IQI forecast that Chinese buying will increase again over the next 12 months, perhaps reaching as high as US$17 billion.

The NAR, which groups together buyers from the mainland, Hong Kong and Taiwan, tracked buying and selling by international clients during the year from April 2022 to March 2023.

China returned as the top country of origin among foreign buyers during the period, accounting for 13 per cent of homes purchased by overseas investors, up from 6 per cent in the same period a year earlier. At the peak, in 2018, Chinese buyers accounted for 15 per cent.

Mexico ranked second, accounting for 11 per cent, followed by Canada.

The report found that 38 per cent of Chinese buyers purchased their property as a holiday home or to rent out, while 30 per cent used it as their primary residence.

“Only about one in every 10 Chinese buyers is purchasing purely as an investment, which is a big change from the mid-2010s, when wealthy Chinese consumers looked to diversify their wealth out of China,” said Ansari.

“In 2023, the typical Chinese buyer is no longer an offshore investor but is on their way towards becoming an American resident and citizen.”

As Chinese investors are rushing into overseas property, less are active in the Hong Kong housing market.

Inland Revenue Department data showed that in June, non-local buyers accounted for just 1.5 per cent of primary and secondary market transactions. Research from investment bank Citigroup shows they accounted for 5.2 per cent of deals on average in the pre-Covid period.