Chinese billionaires take over New York prime property market
Chinese money is hitting New York’s prime property hard and heavy amid slowing domestic growth and the Yuan devaluation in August.
Chinese buyers are doing what any sensible investor would. They’re hedging their bets and their assets as their homeland heads deeper into deflation. As GDP growth and exports slow, the Chinese government’s choice to let the currency devaluate looks like a move to stimulate their ailing export market. Indeed, their manufacturers could benefit from cheaper exports, but the others won’t so they’re moving their assets abroad.
Chinese investors buy trophy property
New York has all the traits of a good investment and its appeal isn’t lost on Chinese investors. The price per square foot of trophy property,
Education, investment and residence: New York has it all
The three main motivations for HNW Chinese buying abroad are education (85%), investment (65%) and emigration (60%) according to Juwai.com, international real estate broker. So understandably, New York ranks first as destination of choice thanks to the proximity of
The top 220 individuals ranked on Forbes’ China Rich List 2014 are billionaires, the top seven have $10 billion each in assets and leader Jack Ma, Alibaba’s founder and executive chairman, a massive $19.5 billion. On top of that, China occupies the first four places on the Forbes List of World’s Biggest Public Companies 2015. So it is not particularly surprising that they’re hitting the Manhattan market hard. Real estate agents for luxury residential and commercial property do voice fears that heavy investing into the market will push the prices beyond a sustainable point. There are equally rumblings against a new “China price” as fierce Chinese investors outbid forcefully and consistently others with cash asset offers.
Record deals cut on hotels
But China’s ailing growth is nearly old news and companies back home have been working to reduce their currency exposure and diversify their portfolio. Even before August 2015, Chinese insurance companies were leading the charge on Manhattan hotels. Anbang Insurance Group clinched the Hilton’s iconic landmark and presidential favourite Waldorf Astoria, only to be upstaged by Sunshine Insurance in February who made history with the
Real estate in Manhattan close to good schools and on Long Island are particularly favoured by the Middle Kingdom’s investment class. Jones Lang Lasalle, commercial real estate service provider, notes that trophy property, particularly prized by the Chinese, shows
As the shadow of deflation looms on the horizon of China’s economic future and New York maintains the magnetism of financial stability and leading property value growth prospects, Chinese assets will continue to flow eastwards. However these investments are greeted with mixed feelings and fears of a bubble on the New York market will certainly not be allayed if Chinese investors continue to compete for real estate as they once did for commodities.
Leigh Stewart, Tranio