Chinese cut realty buys outside mainland

Chinese people's real estate investment overseas hit a new low last year as their selloffs increased, a recent report from property consultancy CBRE showed. However, Chinese buyers increased purchases of homes located near famous educational institutions overseas.

Chinese investors spent $7.5 billion on buying offshore realty in 2018, sharply down from $35.4 billion in 2017. They were net sellers of real estate in the second half of 2018.

Asia-wide, outbound real estate investment was down 36 percent year-on-year to $53.8 billion in 2018, according to the 2018 Outbound Investment Survey.

Coupled with a decline in offshore investment, Chinese investors were found to be net sellers to strengthen balance sheets and recycle capital for deployment in future outbound investments, the report said.

"The pullback from China's investors was not entirely unexpected but encouragingly created opportunities for new strategic investors to amplify offshore investment activities," said Leo Chung, associate director of research for Asia-Pacific CBRE.

The 2019 Outbound Investor Intention Survey released by Cushman & Wakefield Research, echoed CBRE's findings.

According to the survey, due to factors including weakening Chinese investor sentiment, tightened policy control and growing economic headwinds, outbound real estate investment from the Chinese mainland declined 63 percent year-on-year to a four-year low in 2018.

The top three overseas real estate investment destinations are Hong Kong ($9.5 billion), the US($2.3 billion) and Australia ($1.3 billion) respectively, data from Real Capital Analytics and Cushman & Wakefield Research indicated.

Despite ongoing US-China trade frictions and Brexit uncertainties, the US and the UK ranked top and third respectively in terms of sentiment, with countries and regions related to the Belt and Road Initiative taking the second position, according to the Cushman & Wakefield survey.

"Survey results, particularly on sentiment by destinations, views on renmibi (Chinese yuan) appreciation and global gateway property prices have shown the Chinese mainland's real estate investment overseas is becoming more prudent and selective under the guidance of the government investment policies," said Jason Zhang, head of China outbound investment and advisory services, Cushman& Wakefield.

"Chinese overseas homebuyers used to be known for spending big bucks, fast decisions. But in recent years, most of them preferred to slow down and make decisions by comparing various choices. It usually takes between six months and two years for a client to find a house as per his or her requirements," said Jamie Mi, head of international at Kay& Burton, a high-end real estate agency in Melbourne.

Thailand, Australia, the US, Canada, the UK, Malaysia, Japan, New Zealand, Greece and Vietnam are the top 10 countries that generated enquires about properties in 2018, according to Juwai, a Shanghai-based online platform that Chinese buyers use to buy overseas property.

Japan has emerged as one of the most popular markets for Chinese buyers, said Alex Yueng, founder and director of Century21 Culture Center Property Ltd.

"Investors are buying properties in Japan for various reasons, including stable returns, freehold, education, high-quality healthcare services and social welfare," said Yueng. The company, he said, received increased number of enquiries about properties in Japan.