Written by Yuhua Zhang, GEI Associate
In the past year, Chinese investors have injected almost $6 billion capital in U.S. real estate market, $4.5 billion of which was in Manhattan. It is almost triple compared with the number in the whole year of 2014. Chinese buyers, which include not only businesses but also wealthy individuals; have presented ever increasing interest in NYC real estate. In the meanwhile, U.S. property developers are also more willing to market their construction projects to Asian buyers, with Chinese doubtlessly the largest target audience among them.
As a result of the higher interest and demand in US real estate market, U.S. real estate prices have risen significantly in recent several years. Particularly, Manhattan real estate prices present continuously saw increases in these years, reaching an increase rate of 18% in 2015, which is the highest for last 26 years.
Even with such a rapid increase, Chinese buyers still keep unabated a rising passion in U.S. real estate investment, which is expected to be maintained incoming years.
On one hand, rents have grown right along with the rapid increase of real estate prices. In 2015, Manhattan median rents rose by 9.5% to a record high of $3,339 (average per month), which is the fastest pace since 2008. As the world financial center, New York City has been considered as the most unaffordable city to live in U.S.. But the higher rents do produce a steady growth of income for investors.
On the other hand, U.S. real estate is widely known as a stable return investment to Chinese investors. Due to China is still experiencing a period of economic reform, which may have to encounter slower economic growth currently, investing idle capital in U.S. real estate market becomes the best and the most popular strategy for Chinese.
At the same time, U.S. developers also realized the giant business opportunities internationally. Chinese are undoubtedly the largest potential customer group to them. Gary Barnett, the developer who sold New York’s most expensive apartment, has started to market his newest and largest Manhattan condo project to Asian buyers first; Extell also plans to market and sell their “One Manhattan Square” project by holding exhibitions in Shanghai, Hong Kong, Beijing in next month.
It is worth mentioning that they are just some of the numerous largest property developers who decided to market their projects internationally and consider Chinese as their target clients in recent years. It is obviously to see the high attention that US developers pay to Chinese investors.
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