Two major factors driving up housing prices and Chinese people’s motivations for buying houses in the United States

Two major factors driving up housing prices and Chinese people’s motivations for buying houses in the United States In response to the recent hot news that Chinese people are driving up housing prices in the United States, familiar with the operation of the U.S. real estate market...

House prices in Chinese communities have increased

Chinese people live in large numbers in places such as Los Angeles, San Francisco and New York, where most of the houses in Chinese communities are purchased by Chinese people, including those from mainland China and local Chinese in the United States. It is normal for Chinese buyers to outnumber sellers recently, causing housing prices in some specific communities to rise. But it is an exaggeration to say that the Chinese are driving up overall housing prices in the United States. "How can the Chinese make up such a small proportion of the U.S. housing prices?"

Among the new Chinese immigrants to Southern California, 40% will choose to settle in Los Angeles, resulting in a booming housing rental market there. Chinese people mainly gather in the San Gabriel Valley, and houses within a 30-minute drive of Chinese communities are very popular. The same situation occurs in the Chandler area of ​​Phoenix where Chinese people gather. Three major motivations for Chinese people to buy houses in the United States

Currently, there are three main considerations for Chinese people to buy houses in the United States. One is for the education of their children. Many people's children are already studying in middle school or college in the United States. Parents plan to buy a house for their children and sublet it to classmates to collect some rent. Some parents plan to send their children to study in the United States. They have long-term plans and start buying a house now.

The second is to seek a better life. At present, the overall price level in the United States is lower than that in China. The living environment is good, the air is fresh, and the water and food are relatively safe. Therefore, many qualified Chinese are actively applying for investment immigration and buying houses in the United States, hoping to live and retire here.

The third is to find better investment opportunities. At present, domestic housing prices are high and the government has stepped up control. It is no longer easy to speculate in real estate in the country, so many people are turning their attention overseas. After experiencing the baptism of the financial crisis, housing prices in the United States are in the stage of rebounding from the bottom. The price of similar houses is not only much lower than that in China, but also cheaper than developed countries such as Canada, Australia, and Europe. The lower exchange rate of the US dollar makes it more cost-effective for Chinese people to buy houses in the United States.

Currently, U.S. housing prices are beginning to rise, but there is still a lot of room for them to reach their all-time high. The laws and regulations for housing sales in the United States are sound and investment risks are relatively low. These have boosted the return on investment of home purchases, naturally attracting many investors including Chinese.

Two major factors are pushing up U.S. housing prices. The first driver is that the U.S. real estate industry has entered a new upward cycle. The last peak in U.S. real estate was in the first half of 2006, then flattened and then fell. When the financial crisis broke out in 2008, housing prices plummeted, hitting rock bottom in 2009. In the following two years, they hit a second bottom before rising again, and then entered a relatively sustained upward cycle.

The second driver is the quantitative easing policy implemented continuously by the Federal Reserve. As a result of the low interest rate environment and a large amount of liquidity entering the market, housing prices in Southern California increased by more than 20% from August last year to February this year.

American businesses are optimistic about Chinese business

As more and more Chinese people come to the United States to buy houses, American banks, real estate developers, intermediaries and other institutions have also made corresponding preparations. Several major Chinese banks, including HSBC and Huamei, also provide mortgages to Chinese home buyers. A $3.5 million mansion can get a 70% loan and enjoy an ultra-low interest rate of up to 2.52%.