Chinese Couple Paid $34.5 Million For Mansion In Beverly Hills Last Month
It’s not fresh news that cashed-up Chinese buyers continue to plow billions into the North American real estate market, buying new constructions and driving up prices for luxury properties from Vancouver to Manhattan as they have in Hong Kong. Buying for investment, emigration purposes or for children studying abroad, at the highest end, mainland Chinese buyers — as well as other Asian buyers from Japan, Singapore and South Korea — still maintain, by and large, a laser focus on multi-million-dollar properties in the largest American cities. Last month, one Chinese couple spent US$34.5 million on a sprawling mansion in Beverly Hills, California, while Chinese buyers purchased a number of full-floor apartments in the as-yet-unfinished Manhattan high-rise One57 over the past six months, each with a price tag of around $50 million.
But as the Wall Street Journal notes this week, one interesting development in these buyers’ habits over the past few years has been their broadening interest in properties outside of prestige locations like New York and Los Angeles, which is seeing Chinese buyers show up in places like Florida and the Midwest:
Interest is surging even in parts of the country China-based buyers weren’t traditionally interested in. Richard Zhou, a 41-year-old investment advisor who lives in Shanghai, paid $200,000 for a home in a large golf community in Fort Myers, Fla., last year. He said he bought in the community sight-unseen, trusting his friend who had bought a home there a few months earlier. Mr. Zhou spent two weeks studying the U.S. real-estate market and quickly decided Florida was a good bet because “it was highly impacted from the financial crisis,” adding that later in his life he plans to retire there. “Florida is indeed a sunshine state, the weather is really pleasant, and the air quality is very good. Also, the food is safe, too.”
Buyers from China and Hong Kong accounted for $9 billion of U.S. home sales in the 12 months ending in March, up 89% from 2010, making them the second-largest group of foreign buyers of homes in the U.S. behind Canadians, according to data released earlier this month by the National Association of Realtors.
Real-estate agents say that while Chinese investors primarily target New York, Los Angeles and San Francisco, they are beginning to expand into cities in southern Florida as well as outposts such as Seattle and Las Vegas. That’s a sea change from a few years ago, when they were “fearful” of Florida, says Steven Lawson, chief executive of Windham China, a Shanghai-based company that helps find Chinese buyers property in the U.S. “There was a false perception in China that Miami is not a supersafe city because a lot of Chinese watch ‘CSI: Miami’ or ‘Miami Vice’ on TV.”
Over the past year, Mr. Lawson says he sold about eight homes in a large golf community in Fort Myers to Chinese buyers. The houses, which span about 2,500 square feet and come fully decorated, cost less than $250,000—a bargain to Beijing and Shanghai residents used to adding another zero to buy a home of that size.
Chinese real estate investors are not only showing up in larger cities in the American Midwest, they’re appearing in cities less well-known in China, including Toledo, Ohio. As Fortune writes this week:
In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city’s Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.
Though the actual investors in Toledo remain shrouded in secrecy, Fortune points out another reason Chinese investors are spending millions on properties in more sleepy inland areas:
There is at least one more reason some investors would turn to the U.S.: Foreign investors who put at least $1 million into a U.S. business and meet other requirements can be eligible to apply for a green card. The minimum investment in high-unemployment areas, such as East Toledo, is $500,000.