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Most Chinese Investors, The World’s Largest Buyer Group, Will Not Buy Overseas Property In Next 12 Months Due To Covid-19: CLSA Survey
The survey found that Chinese investors preferred Seoul (above) and Singapore due to their proximity. Photo: Bloomberg SINGAPORE (EDGEPROP) – The coronavirus pandemic has alienated Chinese buyers of international real estate, according to a survey last month by brokerage and investment group CLSA, which surveyed 1,600 respondents in 234 Chinese cities and found that 82 percent had no intention of buying property abroad in the next 12 months. About 57 percent said they felt less incentivized to buy due to the pandemic, compared to just 1 percent who said they felt incentivized. “It appears that Covid-19 had quite a negative impact on buyer intentions,” a team led by CLSA Australia property analyst James Druce said in a report recently. They said the pandemic had hit demand hard and the recovery was expected to be slow. Only 5% of respondents indicated they intended to buy property abroad in the next 12 months, CLSA said. These findings. They are significant because Chinese buyers make up the largest group of cross-border buyers in the world. They accounted for $ 21.7 billion or 5 percent of global real estate investment activity from January to September this year, according to Real Capital Analytics, which tracks deals worth more than $ 10 million. They contributed US $ 41.7 billion or 4% of the total last year. According to the survey, 59% of respondents said they would set a budget of US $ 500,000 to US $ 1 million for the purchase of properties abroad, 25% would aim to spend less than US $ 500,000 and 15 percent said that it would spend between US $ 1 million and US $ 3 million. The survey found that Seoul and Singapore were preferred by Chinese investors due to their proximity. Among major western cities, Paris, New York, and Los Angeles were more popular than Sydney, Vancouver, and Toronto, which have historically been more migrant-friendly. The sour relations between Beijing and Canberra have made Chinese investors much more pessimistic about buying houses in Australia. “Certainly, the recent breakdown in Australia-China relations does not bode well,” the report said. Chinese buyers were also buying fewer homes in Hong Kong. CLSA said that only 15 percent of respondents indicated they would consider buying property in Hong Kong, which ranks fifth among cities popular with Chinese investors. Mainland Chinese buyers accounted for 17 percent of all primary and secondary floors purchased in Hong Kong in the last quarter of 2011. This number fell to 5 percent in the second quarter of this year. Non-permanent residents must pay a 30 percent stamp duty on residential properties since November 2016. Additionally, Covid-19 travel restrictions “have prevented mainland Chinese from traveling to Hong Kong and purchasing property,” according to the report, adding that the city had become less popular with mainland shoppers since last year’s anti-government protests. “We expect demand to return from mainland Chinese living on land after travel restrictions are lifted, but it should take time and is not free from potential disruptions from local uncertainties,” CLSA said. However, real estate tech company Juwai IQI Group said political tensions affect demand less directly than many believe. If they are accompanied by practical steps that make it difficult for families to buy abroad, then “we can see their demand displaced to third countries,” said Kashif Ansari, co-founder and CEO of the company. “In the United States in 2020, it became more difficult for students to obtain visas, which helps explain why more students choose Canada, the United Kingdom, Australia and also New Zealand. They are looking for a quality education in English and perhaps the opportunity to work in a challenging field after graduation. They have more options than just the United States, “Ansari said. He said that Chinese shoppers were the largest cross-border purchasing group globally. They were also the largest buying group or closest to the largest buying group in all major destination markets, he added. According to Juwai IQI, there are four conditions that will help countries attract Chinese real estate investments after Covid-19 has receded. Read more: Mainland Chinese investors are selling properties in Hong Kong after China reported the first GDP contraction in four decades. “The first to open up to travel, those who have handled the coronavirus well, those with a strong outlook of the real estate market and those that attract Chinese residents and students will have significant advantages over other destinations, “Ansari said.” We believe that Thailand, Australia and Japan will be among the most desirable. I think we will see a boom in Chinese real estate investment abroad in 2021 and 2022. Credit is cheap, there is an oversupply of shares, prices have fallen in many cases and the outlook for price growth is excellent, “he said. Osaka was a favorite with Chinese property buyers, Centaline Property Agency said. “It’s close to China and new home prices in Osaka are relatively low,” said Terence Law, senior director of major projects at Centaline’s China and Overseas Property Division. A 250 sq. Ft. Studio can be purchased for as little as HK $ 1.2 million. (US $ 154,784) in Osaka, according to Law. A similar property would cost HK $ 4.3 million on Hong Kong Island. Apartments in Osaka fit the budget of most investors, Law said. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia. for more than a century. For more SCMP stories, explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. 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