Chinese people are spending a lot of money on American real estate, owning houses in many areas with sky-high prices.

Chinese buyers of residential real estate in the United States were the largest for the 11th consecutive year, although the number of investments fell more than 40 percent from a year earlier, according to the National Association of Realtors (NAR).

According to the National Association of Realtors, Chinese people are the largest buyers of residential real estate in the US. (Source: Bloomberg)

NAR data shows that Chinese people spent $7.5 billion on U.S. homes in the 12 months through March 2024, compared with $13 billion in the same period last year.

The association currently has 1.5 million members, including buyers from the mainland, Hong Kong (China) and Taiwan (China).

Foreigners now own 2% of the $2.1 trillion U.S. housing market, according to NAR. By volume, Canadians top the list, accounting for 7,100 units. Meanwhile, Chinese nationals bought about 6,000 homes during the same period, down about 45% from the 11,000 purchased in 2023.

The strong dollar makes U.S. real estate particularly expensive for foreigners, said Lawrence Yun, chief economist at NAR. “So it’s no surprise that the number of foreign buyers in the U.S. has dropped significantly,” he said.

Currently, the USD remains strong against other currencies such as the Chinese Yuan (CNY) and the Yen due to higher interest rates in the US. The US Federal Reserve (Fed) has maintained its benchmark interest rate in the range of 5-5.25% for more than a year, significantly affecting the purchasing power of foreign buyers.

Mr. Kashif Ansari, co-founder and CEO of Juwai IQI Group - specializing in real estate technology, commented that in the coming time, the strength of the NDT compared to the USD and housing prices will be decisive for the interest of Chinese buyers when choosing to buy US real estate.

“If the Chinese yuan appreciates against the dollar over the next 12 months as many analysts expect, or if US home prices decline over the same period, we expect the number of transactions from China to increase,” said Kashif Ansari.

The drop in spending by Chinese buyers has pushed the share of foreign buyers down to 11%, from 13% a year ago, according to NAR data.

Notably, more than two-thirds of Chinese and Canadian buyers prefer to invest in cash.

Although behind Canada in terms of the number of properties, the average purchase price of real estate by Chinese buyers is the highest among foreign buyers, at around $697,900 per property, mainly due to the preference of Chinese people for traditional destinations with high prices such as California and New York, accounting for 25% and 10% of total transactions, respectively.

These are the states with the most expensive real estate prices in the US due to higher average incomes and strict zoning regulations that limit new supply, Mr. Ansari said.

“In 2024, the US dropped to the fifth most popular destination for buyers from China, down three places from second place before the Covid-19 pandemic,” he said.

Another factor is that Chinese investor money is now flowing to Southeast Asia, which is geographically and culturally closer, not to mention more affordable.

NAR's report also shows that in 2023, international buyers purchased 54,300 homes in the US, down 36% from the previous period and continuing a downward trend since 2017.

Source: https://baoquocte.vn/nguoi-dan-trung-quoc-manh-tay-chi-tien-mua-bat-dong-san-my-so-huu-nha-tai-nhieu-khu-vuc-co-gia-cao-ngat-nguong-279315.html