Peter Mitchell, AAP US Correspondent
(Australian Associated Press)
An Australian backlash against Chinese property investors has driven some to look to the more open US real estate market, according to a new study.
Chinese investors, described as relative newcomers to the US market, have rapidly increased purchases of US residential properties from $US11.2 billion ($A15.45 billion) in 2010 to $US28.6 billion in 2015, according to the Asia Society and Rosen Consulting Group report.
The report examines how Chinese buying in Vancouver, Canada, and in Sydney and Melbourne has “caused intense public outcry” at what locals believe is “speculative real estate investment by wealthy Chinese that is contributing to bubble-like conditions of inflated home prices and pricing out many local residents”.
Making it more difficult for Chinese to obtain loans from Australian banks and new Australian regulations has resulted in some to switch to the US.
“Consequently, the backlash to increased levels of investment, whether warranted or not, has driven some Chinese investors to invest in the United States,” according to the report.
“The sheer size of the real estate market, coupled with the openness of the investment culture, makes the United States particularly attractive in a global context.”
The report also predicts a slowing in China’s investment in overseas property.
“We believe China’s economic turbulence will create a short-term speed bump for real estate investment overseas, including in the United States,” the report states.
“In the near term, a six to 24-month temporary period of increased capital controls is likely – either formally via policy announcements or informally through administrative processing – until the Chinese currency can be re-aligned with that of global partners.”