Report: 60% of China’s HNWIs Plan to Buy Overseas Property

    A new report says that concerns over yuan devaluation and property bubbles are prompting China's rich to buy real estate overseas with a plan to get a third of their wealth out of the country.
    Los Angeles is a top global destination for wealthy Chinese property buyers. (Shutterstock/trekandshoot)
    Liz FloraAuthor
      Published   in Consumer

    As China’s rich remain eager to leave the country for destinations in North America and Europe, the results of a new survey find that they’re also enthusiastic abut getting their money out of the country—and see overseas property as their main ticket.

    According to a recently released Hurun report called “Immigration and the Chinese HNWI 2016,” 60 percent of Chinese high-net-worth individuals (HNWIs) plan to buy property abroad within the next three years. Defined as those with US$1.5 million or more, this group is concerned about both yuan depreciation and property bubbles in cities, says Rupert Hoogewerf, chairman and chief researcher of Hurun Report.

    Property is the most popular overseas investment for China’s rich, says the report, which finds that the main things rich property buyers consider when choosing real estate abroad are value for money, rate of return, and help with immigration status, respectively.

    “The trend this year goes beyond emigration to global asset allocation,” says Hoogewerf. “For rich Chinese today, the target is to have one third of their wealth overseas. Buying houses and foreign exchange deposits lead the way.”

    The report finds that 56 percent of Chinese HNWIs are worried about China’s yuan depreciation, and the interest in moving money overseas stems from a desire to keep it safer than it would be in China after yuan has decreased around 3.5 percent in respect to the U.S. dollar in 2016. A total of 64 percent said “risk control” is their top consideration when buying property. “For Chinese HNWIs today, their investments overseas are conservative nest eggs, not risk capital,” says Hoogewerf.

    A total of 43 percent of respondents said they will buy residential property for living in or renting out, while asset allocation and children’s education followed as main reasons for buying. As a result, they’re most interested in buying properties near good schools, followed by downtown locations, while proximity to Chinese communities came in third in importance.

    English-speaking countries are top immigration destinations China’s wealthy. The United States is at they top of their list, followed by the UK in second place, Canada in third, Australia in fourth, and Singapore in fifth. In the United States, West Coast property-buying hotspots Los Angeles, San Francisco, and Seattle dominate as the top three cities globally for wealthy Chinese property buyers. U.S. cities round out the top five with New York and Boston, while Vancouver is sixth.

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