Myrtle Beach’s boardwalk could soon be crowded with Chinese visitors
For many rich residents in the neighbourhood of Shuangjing near Beijing’s central business district, South Carolina is not far away.
Decorated with transparent glass and maroon-coloured signs, USA City Exhibition, situated on a bustling, narrow street corner flanked by high-end residential buildings, can be easily mistaken for a museum of American urbanisation.
However, the star of this showroom is one of the hottest investment products in today’s China: US properties.
The exhibition hall, roughly the size of a tennis court, advertises homes in South Carolina’s Myrtle Beach to rich Chinese. The area, it claims enthusiastically, remains “an untapped world-class beach vacation city” offering sunshine, elite golf courses and blue skies.
Selling Heavenly Golf Courses
Golf is a big part of the American dream, as it’s sold in Beijing
“New trend in investment. Invest 2 million RMB+ and you will be able to achieve your American dream.” reads a Chinese pamphlet stacked at the reception table. On it, a picture of a plane taking off looms over a waving American flag, besides the gushing English tagline, “USA DEVELOPMENT, NEW HEAVEN.”
US City Exhibition, which only opened last year, underscores Chinese property agents’ eagerness to tap into a growing interest by deep-pocketed Chinese to buy homes in the States. The jumb0-sized property showroom is run by Easy Founders, a Jiangsu-based real estate company, which is partnering with US developer Founders Development LLC to sell golf-themed homes in South Carolina.
Their presence in one of Beijing’s most affluent areas, where BMWs and Porsches are a common sight, speaks volumes about the growth of China’s investor class.
Chinese Now the Biggest Foreign Investors in US Real Estate
Chinese buyers, including those from the mainland, Hong Kong and Taiwan, poured $28.6 billion into the US residential home market from April 2014 to March 2015, overtaking Canada as the biggest foreign buyers, according to the National Association of Realtors. The average Chinese buyer spent $831,800 on their new home in America, more than double the amount spent by their Canadians counterparts.
That momentum is receiving continuous scrutiny and there is reason to believe the trend will persist, as rich Chinese look overseas to park their wealth in the face of an economic slowdown.
This week, Asia Society and Rosen Consulting Group published what they say is the most comprehensive study on Chinese investment in US properties to date. “More than any foreign investor other than Canada, China stands out for the breadth, depth, and speed of its participation in the US real estate market.” The study noted.
Between 2010 and 2015, Chinese buyers, including individuals and companies, spent a total of $110 billion on residential and commercial real estate in the US, according to the study.
Chinese Investment Expected to Double by 2020
Chinese interest in US real estate is expected to result in $218 billion in investment by 2020
And despite a strong dollar and expectations that Chinese currency is likely to weaken, the study estimated that Chinese investment in US commercial and residential real estate is likely to double to $218 billion by 2020.
Encouraged by higher investment yields, Grace, who lived in Beijing before moving stateside, bought an apartment for $ 320,000 in Houston, Texas, in 2013 after giving birth to a child two years ago in the country. Now she is running a center offering services to pregnant Chinese mothers in her 6-room apartment.
“And if I rent this apartment at a market price, I will be able to receive a monthly rent of $3500. Overall an annual investment yield will be 7 percent,” the entrepreneur told the Chinese newspaper the 21 Century Business Herald.
Other reasons for Chinese to buy homes in the States include its clean air and good schools. For example, in Boston, a popular city university destination among Chinese students, a surge of investment in property in recent years the influx in students has been followed by a wave of property investment, according to local media.
The US, Canada and Australia are the top overseas property investment targets for Chinese, with 69 percent buyers making their acquisitions in cash, the 21 Century Business Herald reported, citing data from a Chinese real estate agent.
This cross-border homebuying trend coincides with a purchasing spree by Chinese conglomerates, with Chinese insurer Anbang at the forefront of the activity, having snapped up New York’s Waldorf Astoria hotel and Strategic Hotels & Resorts from Blackstone in the past three years. And just this month, China’s biggest developer Vanke has agreed to build a 43-story residential building in Seattle with a local partner.
But for real estate agents like US City Exhibition in Beijing, the biggest draw for Chinese customers to invest seems to be American values.
“The whole world has the American dream. For over two hundred years, the American dream of equality, freedom and democracy has encouraged young people from all over the world to come here to create their own values. Therefore, the US has become the cradle of the successful people,” its ad reads.
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