The Chinese people are launching a wave of overseas home buying, but they have different investment mentality, so be careful not to blindly follow the trend

The Chinese are launching a wave of overseas property buying, but they have different investment mentality, so don’t blindly follow the trend. Editor's note: Whether in their ancestral homeland or overseas, the Chinese people's habit of buying properties is a tradition...

Editor's note: Whether in their ancestral homeland or overseas, the Chinese people's habit of buying properties is a national consumer culture that has been inherited for thousands of years. Today, while many countries are still recovering slowly from the financial crisis, the number of wealthy people in China has increased exponentially. With the increase in the number of immigrants overseas, this emerging wealth has brought a large amount of hot money to the overseas real estate market. The Chinese began to travel across the ocean and boldly "go out", spending large sums of money to buy bargains in the United States, Canada, Australia, Europe, Southeast Asia and other places, setting off waves of overseas "housing whirlwinds." However, when more and more people are keen on overseas real estate investment, the accompanying risks also attract more attention. Some market observers pointed out that overseas real estate purchase is, after all, a "long-term" investment based on physical distance. The investment process requires more caution and sufficient investigation and judgment. Never blindly follow the trend in a hot-headed manner. How to understand the overseas real estate market with a positive attitude is worth pondering.

The domestic real estate market is in sluggish condition. Chinese investors have launched a craze for overseas property purchases. Since the beginning of this year, affected by a series of real estate control policies, the prospects of the real estate market in major Chinese cities have been unclear, and the transaction volume of the property market has also fallen sharply. "Purchase restrictions" and "price limits" have caused property market investors to suppress their investment enthusiasm again and again, and the funds in their hands are eagerly looking forward to a way out. Overseas real estate has opened a channel for investors at this time. With the increase in the number of immigrants overseas, the Chinese people's enthusiasm for real estate investment is crossing the ocean and increasingly affecting the real estate market in many countries and regions. Industry insiders pointed out that China's property market control policies are expected to squeeze out more than 400 billion yuan of investment funds. How much of it went to the overseas property market cannot be estimated. In the first six months of this year, Colliers International's international property department in China has completed over RMB 130 million in overseas residential project investments. Vancouver, Canada, has become one of the major investment destinations. Other popular countries include the United Kingdom, Australia, the United States, Singapore, and Germany. The proportion of home purchases by mainland Chinese investors in Vancouver, Canada, continues to increase. As of the first quarter of this year, the proportion has reached 29%, an increase of 4 percentage points from 25% last year. Driven by China factors, Vancouver real estate prices rose by 12% in 2010. The Canada Mortgage and Housing Corporation predicts that Vancouver real estate prices will continue to rise by 3% this year. According to data from the National Association of Real Estate, overseas home buyers invested approximately $41 billion in the U.S. real estate market from March last year to March this year. Among U.S. real estate buyers, 9% are from China, ranking second among foreign buyers in the U.S., second only to Canada, which accounts for 23%, and higher than the United Kingdom, Mexico and India, which are tied for third with 7%. In the UK, in the past two months alone, Chinese investment in buying houses in London has reached as high as 120 million pounds (approximately 1.27 billion yuan). In London's financial district, Canary Wharf, one-third of new homes sold were bought by buyers from mainland China and Hong Kong. In 2010, 10% of new houses in London were bought by Chinese. Savills also disclosed that a large amount of overseas funds have poured into the London real estate market, among which funds from China have grown rapidly. In South Korea, from January to March this year, the area of real estate purchased by Chinese in South Korea reached 165,600 square meters, double the same period last year, with a total value of 74.9 billion won (approximately 448 million yuan), nearly four times more than the 15.6 billion won in the same period last year. Also in Asia, in Singapore, mainland Chinese home buyers have surpassed Indonesia and Malaysia, becoming the largest foreign buyer of private homes in Singapore. So many Chinese investment in overseas real estate markets has set off a round of boom. "Overseas home buying boom".

You need to be cautious when buying real estate overseas by “following the trend” and do not blindly follow the trend. Although overseas investment and housing are popular, they also face various risks. Some market observers pointed out that overseas real estate purchase is, after all, a "long-term" investment in physical distance, and one needs to be more cautious during the investment process. Although housing prices in many overseas countries are not high, the costs involved in purchasing, holding, and selling a house are not small. In addition to being wary of falling property prices, you also need to be aware of the possibility of exchange rate fluctuations. With the rapid development of China's economy, China's wealthy class continues to expand. In order to find more development opportunities or provide a better educational environment for their children, some wealthy people have set their sights overseas. Countries such as the United States, the United Kingdom, Canada and Australia are priority investment destinations for Chinese investors. Recently, foreign media reported that Chinese investors spent hundreds of millions of dollars in New York to purchase real estate. However, when Chinese invest abroad, they must make careful choices from a professional perspective, a risk identification perspective and their own economic conditions, and do not blindly follow trends. A Chinese buyer who once went to the United States to invest in real estate said that two years ago he spent US$400,000 to buy a villa in a poor location. Although the house price was relatively good value and has increased a bit now, when he was about to transfer the villa, he found that it was not as easy to sell as he thought. In addition, he had to pay tens of thousands of US dollars in property taxes every year. It was not cost-effective. Another buyer from Wenzhou said that in 2009, he bought three "court auction houses" in the United States under a strong impulse to buy at the bottom. Now I regret it because "When I bought a house, I only went to see it once. Later I found out that the house was old and in a remote location. In order to use the rent to offset the daily maintenance costs and property taxes, I had to renovate it. The money spent was almost the same as the price of buying the house." An American real estate agent said that most Chinese people who go abroad to buy houses now have learned to find a good agent in China before setting off. However, he believes that such progress is not enough. Chinese people still have many misunderstandings when buying houses overseas. For example, the first choice is small apartments in the city center. This is completely copying domestic experience. However, in countries such as the United States, Japan, and Australia, if the location in the center of a big city is not chosen correctly, not only will the value increase slowly, but the tenants will also be international students or low-income earners, which can be said to be the most unpopular type of real estate investors. Therefore, how to invest needs to be fully investigated and judged, and you must not follow the trend blindly.

Understand the overseas real estate market with a positive attitude and cultivate "awareness of raising a house" Today, Chinese investors are becoming important buyers in overseas real estate markets. How to understand the overseas real estate market with a positive attitude has attracted the attention of media and professionals at home and abroad. "Japan's New Overseas Chinese News" recently published an article saying that compared with investing in Chinese domestic real estate, investing in overseas real estate requires actively cultivating "awareness of housing maintenance." As we all know, the Japanese real estate market is relatively stable and has relatively high yields, which is also the biggest factor attracting Chinese investors. However, it is worth paying attention to Chinese investors that after purchasing a house, they need to pay taxes and management fees in accordance with Japanese law. There are also cases where personal credit records are affected by default in property management fees. The purpose of investing in overseas real estate is of course to maintain and increase the value of the property. However, as an investor, in addition to paying attention to real estate income, you also need to actively understand the relevant local laws to avoid unnecessary losses. As an investor, in the long run, by following the experience and suggestions of relevant investment institutions and re-understanding the overseas real estate market with a positive attitude, you can expect higher returns in the future. Zhang Yongheng, manager of the overseas property department of DTZ, an international institution specializing in overseas real estate brokerage business, pointed out that the market environment, real estate policies and legal constraints of each country and region are different. If overseas investors who buy real estate still rely on the inertial thinking of speculating in domestic real estate and think that "you can make money if you buy it," they are likely to encounter Waterloo. According to comments from relevant Chinese media, in the final analysis, Chinese overseas real estate speculation has become a common practice. On the one hand, they are forced by the "severe internal situation" and on the other hand, they are confused by the "superior external environment." Whether it is demand or speculation, what determines their offensive and defensive decisions is the uncertainty of domestic real estate, and what ultimately determines whether they stay or leave will be domestic market changes.