For years, Chinese money has been the darling of the real estate industry, but that has been changing. U.S. home sales to Chinese buyers are likely to drop to an eight-year low, according to a new report by Reuters.
According to the National Association of Realtors, Chinese buyers now account for 11 percent of all foreign sales and remain the top buyers in 2019. But the $13.4 billion investment for the year ending in March is down more than 50 percent compared with more than $30 billion in both 2017 and 2018.
Multiple factors including the trade war, Chinese restrictions on moving money out of the mainland, a slowing Chinese economy and the dollar’s strength, have fueled the decrease in recent years.
And that decline has hit hard on the luxury apartment market in Manhattan, according to real estate broker Jason Haber at Warburg Realty. “Every other article in the news today and real estate is ‘high-end market struggling,’ ‘luxury market struggling.’ A lot of that is because of the decline of the Chinese buyers.”
Haber said many of his Chinese clients move their money out through Hong Kong. But the ongoing pro-democracy protests and possible changes to the U.S.-Hong Kong relationship are creating more uncertainty.
“Everyone is watching that to see what’s going to happen,” Haber told NTD, “I think that’s a very significant geopolitical event. That could have very significant consequences here. The longer that goes on, and the tension between mainland China and Hong Kong could have vibrations in our real estate market here.”
Haber said domestic buyers can make up a big piece of the gap created at lower prices, but haven’t been able to fill up the whole difference.
American buyers made five of the 10 most expensive purchases in 2018, compared to only three in 2015. While the number of Chinese buyers decreased from three to zero.