China's wealthy mainly see themselves as investors when it comes to buying property. (Sotheby's International Realty)
Uncertainty about China’s volatile stock market has long made luxury real estate a key asset for investment-minded Chinese high-net-worth individuals. When it comes to their tastes, preferences, and reasons for buying properties, a new report by Sotheby’s International Realty finds that China’s affluent are far from identical to wealthy consumers from other countries.
Sotheby’s new study of high-net-worth real estate customers compares purchase habits for luxury properties among buyers from China, the United States, the UK, and Brazil to pin down key trends driving the affluent search for the perfect luxury home (or two, or five).
The report’s main finding about Chinese consumers isn’t surprising: they’re most motivated by investment when buying luxury property. Ninety-six percent of affluent Chinese consumers have purchased a property within the past three years, and they are significantly more likely to consider themselves “investors” in real estate than groups from other countries. Yielding a return on investment is a key driver for 99 percent of China’s wealthy, compared to 89 percent for those in both the United States and the UK.
Concerns over a China property bubble have dampened Chinese confidence in the strength of the housing market, which is much lower than that of wealthy buyers from other countries, finds the report. It also reveals that investment isn’t the sole reason they’re buying. With a huge cultural emphasis on family, China’s wealthy are the group most likely to buy a “legacy home” intended to be passed on to children.
When it comes to the most-desired luxury home amenities, China’s wealthy have preferences that are significantly different from those of rich buyers from other countries. The study finds that they care far more about finding places to display their art than store boats or multiple cars, which are top preferences for Brazilian and British buyers. Helicopters appear to be the transportation of choice for some of China’s wealthy, as they rank second in demand for helipads. In addition, 48 percent of Chinese buyers said they would like to have an eco-friendly home, and 32 percent want to design the house themselves.
With an eye for investment, location is the most important reason for purchase for 82 percent of Chinese consumers, while size ranks second at 46 percent. Asia is the most-preferred location, with 37 percent saying that’s where they plan to buy their next property, but Europe and North America aren’t far behind at 28 percent and 25 percent, respectively.
Even if they don’t have boats, waterfront property is still the most popular choice for the majority of China’s rich, followed by farm or ranch property, vineyards, and historic sites.
