Researchers at the overseas property buying portal Juwai.com have published a report detailing the growing affluence and purchasing behaviors of Chinese American real estate buyers. A copy of the report is available at http://iq.juwai.com/zh. Below, Realogics Sotheby’s International Realty (RSIR) summarizes the key findings of this report for our clients, customers, and partners.
In the U.S. today, Chinese Americans of all national origins are now the leading population segment among persons of Asian ancestry. There are now seven Chinese Americans for every five persons of Chinese origin who were living in the U.S. just five years ago, and they now comprise 23 percent of all Asian Americans. They are gaining in net worth as well, having spent $105.1 billion on real estate in the U.S. Seattle is the fourth-leading city for these Chinese American real estate investors.
Seventy-six percent of Chinese Americans were born overseas, and most continue to speak their native language at home and prefer news and messaging that speaks to them in that language. Many are not confident of their English speaking skills, and they are often less fluent than other Americans of Asian origin. This does not indicate a lack of education; on the contrary, Chinese Americans are better educated than Americans generally. Rather it indicates the resilience of the Chinese culture among Chinese Americans, whose second and third generations continue to speak their ancestral language, when other immigrant groups have tended to assimilate to English.
Family is highly important to Chinese, who are more likely to be married, and more likely to live in multigenerational households. These values bear on home purchasing by Chinese families, inclining them to pool wealth in order to buy larger homes with the kinds of accommodations that an extended family would need, such as separate entrances, multiple baths, and more than just one living room or kitchen. Home-builder Lennar reports that such homes sell at a 39 percent premium to the average home they offer.
Multiple generations of Chinese in a single family will have input into home buying decisions, and may contribute funds or be involved in purchasing negotiations.
As of 2010, Chinese household net worth had surpassed that of other U.S. households by 31 percent. Families from Hong Kong and Taiwan are often importing substantial savings from their countries of original; but among Mainland Chinese, this is not clearly a case of imported wealth. These Chinese families tend to be less affluent upon arrival than immigrants from Poland or India, for example. Yet 20 years after immigrating, Chinese Americans tend to lead all these immigrant groups, with implications for future wealth accumulation.
Chinese Americans are historically concentrated in clusters across the U.S., but this tendency is beginning to fade as new waves of Chinese immigrants are beginning to seek locations away from the traditional Chinese-American population centers. “Secondary markets are becoming a primary focus in part due to affordability and prospects for capital appreciation,” states Dean Jones, President and CEO of Realogics Sotheby’s International Realty and founder of its Asia Services Group. All top 20 metropolitan regions of the U.S., Chinese Americans are among the top five groups of Asian origin. Seattle is one of the six cities where Chinese are the largest Asian-American group, others including New York, Los Angeles, San Francisco, San Jose, and Boston.
Real Estate Spending
Outside the U.S., the average price paid by Chinese for a property is $1,459,512, while the price they pay in the U.S. is somewhat lower at $1,292,171. They tend to pay significantly more for property than the median price buyer in nearly every market in which they buy.
Domestic U.S. Destinations for Real Estate Purchases
Most of the 15 top destinations for Chinese-American home purchases are in the Western states of the U.S. New York is the most popular U.S. city for Chinese-American purchases of real estate, while Seattle ranks fourth. The destinations for Chinese-American purchases tend to align with where Chinese Americans live, but not in every case. According to Juwai.com, Detroit is the fifth most popular destination reported to them by Chinese buyers, although that city is not among the top 15 home cities for Chinese Americans.
International Destinations for Real Estate Purchases
Chinese* have become known worldwide as international buyers of real estate. They prefer developed economies and English-speaking countries such as Australia, the UK, Canada, and the U.S. – the top four destinations for outbound real estate purchases, tourism, and educational investment from Mainland China. Properties in the UK and the U.S. rank fifth and sixth for the highest average prices paid by overseas Chinese American buyers.
* The Juwai.com report refers only to “Chinese Americans.” This remark, however, is true of ethnic Chinese everywhere who have accumulated sufficient savings to buy.