Rich Chinese – biggest buyers of luxury real estate
Chinese are now the world’s most influential buyers of new-build luxury property, spending an average of more than $2.8 million per purchase in competitive markets including Hong Kong, New York, and London, according to a new report Global Development Insight, a survey published by Knight Frank.
The quarterly report, which includes data for the year up to the end of July, found that Chinese are the top purchasers of new-build residential property in cities including Sydney and Hong Kong, and are active buyers in Kuala Lumpur and Bangkok. They are also showing growing interest in top Western markets.
The number of high-net worth Chinese—those with a minimum of $1.6 million in investible assets—has more than doubled in the last four years to 700,000, and Bain & Company, a consultancy, expects the number of super-rich to grow another 20 percent by the end of the year. Knight Frank’s Wealth Report, meanwhile, forecasts the number of high-net worth individuals in China to grow 137 percent in the next decade.
Chinese buyers’ growing interest in foreign luxury property is fueled partly by a strong yuan and a slowing domestic economy. Many wealthy Chinese nationals are also buying homes abroad because of domestic limits on home purchases and migration. This year, outbound property investment by wealthy individuals is expected to grow by 30 percent, according to estimates by real-estate consultancy Jones Lang LaSalle. The most popular destinations, according to the firm, are the United States, Canada, Australia, and the U.K. Outbound property investment deals in 2013 reached $2.7 billion as of September, compared with $1.6 billion during the same period last year, according to Dealogic, a data tracker.
China’s wealthiest are also emigrating overseas in growing numbers. One third of Chinese with a net worth of more than $16 million have already emigrated overseas, according the first annual Report of International Chinese Migration. Another third have investments abroad, nearly double the number that reported making similar investments in 2011, according to a study this year by China Merchants Bank and Bain & Company.
In the United States, wealthy Chinese have been buying up luxury property in places like New York and California for years. But their appetite for property investments is so great that they are also now purchasing distressed commercial properties in American cities such as Detroit, where office buildings, hotels, and other properties are being sold at steep discounts.
Chinese aren’t alone in Asia among the top buyers of luxury new-build property. Singaporeans and Russians were next on the list, beating out buyers from the United Kingdom and United States. Knight Frank expects Chinese, Russian, and U.S.-based investors to retain and grow their market share, while Latin American buyers, particularly from Brazil and Mexico, are predicted to feature more prominently in the global new-build market.