China’s Buyers in a New York State of Mind

Juwai

A screenshot shows some of the New York real estate listings targeting Chinese buyers on Juwai.

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The American dream is alive and well among China’s property buyers.

The U.S. ranks tops among mainland Chinese looking to buy homes outside their country, with New York being the most popular city, according to a survey of searches on Chinese-language property portal website Juwai.

The site, which posts sales listings for homes from 53 countries, also said that owning real estate abroad is becoming increasingly a middle-class affair. Previously, Chinese buyers were more likely to be wealthy families seeking pricey a pied-à-terre in America’s toniest neighborhoods, but today, the ranks of the upper-middle-class are swelling as they seek homes for investment, the company said.

“There’s just a bigger appetite for the U.S., and New York in particular,” said Andrew Taylor, a founder and co-chief executive of Juwai in Hong Kong.

“And what’s changing is that they’re now looking for lower-priced properties instead of just searching for the ultra-luxury homes. People are looking for yield, and they want to diversify out of China. It’s not just the wealthy who are buying: The upper-middle-class are searching for properties under US$1.1 million and the real sweet spot is under US$750,000.”

Juwai launched in 2011 and lists 2.4 million properties. It helps real estate agents translate their listings into Chinese and posts them on the site for a flat advertising fee. It also hosts a call centre to field inquiries from prospective buyers who can access the site and use the service for free.

The U.S. was an overwhelming favorite destination to buy, garnering more than triple the searches than second-place Australia. The U.K., Singapore and Canada made up the rest of the top five.

Within the U.S., New York was the most-searched city for Chinese real estate buyers, followed by four Californian cities to round out the top five — San Francisco, Palo Alto, Los Angeles and Orange County.

Realtors on the U.S. west coast also noted the ranks of the Chinese upper-middle-class buyers are growing.

“It started with the trophy homes and the big properties, but increasingly, the spectrum of buying has broadened,” said Joel Goodrich, an agent in San Francisco with Coldwell Banker who estimates about 15% of the deals he does involves mainland Chinese buyers. “A trend we’re seeing is more and more buying high-rise units with all cash and renting it out for a 3% to 4% return. They’re also looking beyond the typical Chinese neighborhoods to homes in places like Silicon Valley.”

Juwai’s Mr. Taylor said he’s noted a sharp increase in recent months on the web site of lower net-worth Chinese buyers looking at cheaper European properties, seeking to pick up a house in a country that offers a resident visa in return for investment. Greece, Cyprus and Portugal have all launched programs to grant visas to those who purchase homes over a certain amount – as little as  €250,000, in the case of Greece.

Mr. Taylor also noted that Chinese buyers are adventurous and willing to buy in remote or lesser-known locations. A block of new apartment units in Sofia, Bulgaria were marketed and sold to Chinese investors on the site, he noted, adding that Chinese buyers made deals on houses in rural Australia and New Zealand.

Still, the U.S. remains the biggest draw, thanks in large part to pop culture. “Call it the Hollywood factor,” Mr. Taylor said. “So much of what Chinese people know of the U.S. is still from movies and television and that’s the image and lifestyle they want to buy.”

–Jason Chow. Follow him on Twitter @jjasonchow