More Cash Flush Chinese Buyers Attracted to US Market

By Joel Cone, Staff Writer

They  can’t own property in their homeland; they can only lease it from the  government. The number of millionaires there is growing and they want to invest  their money somewhere other than their own country. So buyers from mainland China are looking to purchase U.S. real estate — both residential and  commercial properties. The housing markets they are looking at come with high  price tags, but their native currency has much greater purchasing power in the  U.S. market.

Whether  it is New York, Los Angeles, or San Francisco, these buyers are coming to the  table with all-cash deals in some of the priciest parts of the country, as well  seeking out foreclosed  homes in areas hit hard by the housing market crash such  as Florida and Nevada, reported USA Today.

According  to figures reported by RealtyTrac,  California has led the nation in total foreclosure activity since January 2007  (that’s 62 consecutive months through February 2012) while Florida has ranked  second for the same period of time. Nevada, on the other hand, took over the  nation’s top spot for highest foreclosure rate from Colorado in January 2007  and has not relinquished the title since.

However,  with cash at their disposal, these same buyers are just as interested in trophy  commercial properties and hotels in The Big Apple as they are in foreclosed  homes for sale, said USA Today.

In the U.S., the  Chinese are now the second-largest foreign buyers of homes, behind Canadians,  accounting for $7.4 billion of sales in the 12 months ended March 2011, up 24  percent from the previous 12 months, according to the National  Association of Realtors. Buyers from China and Hong Kong also spent $1.71  billion on commercial property in the U.S. in 2011, more than quadruple their  investment in 2008, according to Real Capital Analytics.

Those numbers  likely understate Chinese investment, as investors may buy property under  business entities they’ve set up in the U.S., says Patrick O’Neill, founder of  ONeill Group, a Hong Kong-based company that helps Chinese buyers find U.S.  property.

According  to USA Today, 40 percent of Chinese buyers are looking for investments, while  60 percent are looking for a place to buy in order to have good schools for  their children or for business or immigration purposes.

Some U.S.  lawmakers also see foreign investment as a way to boost the U.S. housing  market.

Legislation proposed last fall by Sens. Charles  Schumer, D-N.Y., and Mike Lee, R-Utah, would let foreigners get a three-year  resident visa if they invest $500,000 in U.S. real estate, including $250,000  for a primary home. They’d have to live at least 180 days a year in the  property and pay taxes here.

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