US housing market still ‘very appealing’ for Chinese buyers, with purchases tipped to surge in 2022 (rent, loans)

[As Above So Below...]

Originally Posted by Gaylord_Focker

I think the Chinese will still favor California. The negatives of California , the income tax, is meaningless to them. And the fiscal positive, property tax don’t escalate as your home increases in value, are great for investors.

Which means housing cost will continue to skyrocket in California and that will make it harder for younger potential home buyers to stay there.

[Gaylord_Focker]

Originally Posted by As Above So Below...

Which means housing cost will continue to skyrocket in California and that will make it harder for younger potential home buyers to stay there.

Yep.

[mhays25]

California is more of a draw, certainly. The larger existing Chinese and Chinese-American populations, two much larger cities, and weather will be big factors.


But Seattle was ramping up enormously pre-Covid. Sea-Tac's improvements have allowed a surge in flight connections, continuing this winter with the new arrivals facility. We're the closest big US city. And the Chinese community is pretty sizable despite not being on the LA/SF/Van level.

[Gaylord_Focker]

Originally Posted by mhays25

California is more of a draw, certainly. The larger existing Chinese and Chinese-American populations, two much larger cities, and weather will be big factors.


But Seattle was ramping up enormously pre-Covid. Sea-Tac's improvements have allowed a surge in flight connections, continuing this winter with the new arrivals facility. We're the closest big US city. And the Chinese community is pretty sizable despite not being on the LA/SF/Van level.

For sure. Seattle to me, feels more Asian than LA honestly. Not SF or Van level of course. But to me, if I were a Chinese investor, I look towards California because of the property tax issue.

[Veritas Vincit]

Originally Posted by mhays25

By extension, Americans shouldn't be able to buy second homes in other countries.

I'm not saying I agree, but it would be consistent.

Actually this might mean more second homes bought by Americans in the US...this might cause a big surge in vacation areas and towns in cities' orbits, though it might equal out vs. foreign buyers on average.

PS, if you want to bring countries closer together, with no chance of ever going to war, let their citizens buy properties in each others' borders. Same if you want to even out the flow of cash we're sending over for manufactured goods.

Simple isn't simple.

Many countries do in fact make it quite difficult for foreigners to buy property. In Poland for instance a permit is required that needs to be approved by the government. In Switzerland I believe there's often quotas. In SE Asia quite a few countries just plain prohibit real estate sales to foreigners who aren't residents.



And in fact, the People's Republic of China i.e. the subject of this thread has significant limitations on foreign purchases of real estate as well.



I believe the 2nd part of what you say is a myth. German companies had significant assets in the United States prior to WW2 and indeed U.S. companies had such assets in Germany as well (incl. significant manufacturing for giants like Ford and Coca-Cola). That naturally did not stop the war. What happened was that when war was declared, the governments in each country simply confiscated said enemy property. Upon conclusion of the war, the German assets of U.S. companies (provided they weren't in the Soviet-controlled area) were simply returned to those U.S. companies (hence why Ford still owns a German subsidiary today) while the assets of German companies in the U.S. went to U.S. owners hence why there was a pharmaceutical company called Schering-Plough based in NJ (now merged with Merck).

[mhays25]

You have good points. But the world is much closer today, with dozens of flights back and forth between the US and China per day, tens of thousands (or more?) Chinese students in the US, tight supply chain and business dependencies, etc.


Regarding buying restrictions, I don't dispute that it's done. But we should consider the implications, which would be significant if applied consistently.

[crltn19]

Originally Posted by mhays25

You have good points. But the world is much closer today, with dozens of flights back and forth between the US and China per day, tens of thousands (or more?) Chinese students in the US, tight supply chain and business dependencies, etc.


Regarding buying restrictions, I don't dispute that it's done. But we should consider the implications, which would be significant if applied consistently.

In fact there's hardly any flight between the two countries these days and you do know their current leader has been trying for years to decouple from the rest of the world and become more self sustaining?

[Veritas Vincit]

Originally Posted by mhays25

You have good points. But the world is much closer today, with dozens of flights back and forth between the US and China per day, tens of thousands (or more?) Chinese students in the US, tight supply chain and business dependencies, etc.


Regarding buying restrictions, I don't dispute that it's done. But we should consider the implications, which would be significant if applied consistently.

I think it's fair to say that the U.S. is pretty globally 'tied up', and I'm not even saying it should totally withdraw from that. There's a lot of benefits to be gained from having international exposure for sure.



But I believe an important part of international relations is reciprocity because when it all comes down to it, you do need to ensure your country and its citizens get a fair shake. However, there is no such reciprocity with China. While we're talking about Chinese investors buying up not insignificant chunks of assets over here, *everything* U.S. entities and persons do in the PRC is subject to restrictions and government interference.


We can't pretend the PRC is a country like any other, and I think for a long time in the last 30 years we did because even though all signs pointed the other direction, it was a more convenient, and for some individuals very profitable, notion.

[Gantz]

Originally Posted by As Above So Below...

Which means housing cost will continue to skyrocket in California and that will make it harder for younger potential home buyers to stay there.

That is because California, like most other locales, just refuses to build more housing in any decent quantities. It doesn't matter who is buying the homes - Chinese, Blackstone, retiring boomers, illegal aliens, the home prices will keep going up if people are that averse to new housing supply. All of these issues can simply be resolved by allowing developers to build more housing.

Letting foreigners buying houses here is a no brainer. They basically do not live here and do not use our services, yet they will have to pay all of the property taxes and everything else. This is a win win for everyone. The government pretty much gets free tax revenue while taxing people who are not even US citizens.

[mhays25]

Originally Posted by Veritas Vincit

I think it's fair to say that the U.S. is pretty globally 'tied up', and I'm not even saying it should totally withdraw from that. There's a lot of benefits to be gained from having international exposure for sure.

But I believe an important part of international relations is reciprocity because when it all comes down to it, you do need to ensure your country and its citizens get a fair shake. However, there is no such reciprocity with China. While we're talking about Chinese investors buying up not insignificant chunks of assets over here, *everything* U.S. entities and persons do in the PRC is subject to restrictions and government interference.

We can't pretend the PRC is a country like any other, and I think for a long time in the last 30 years we did because even though all signs pointed the other direction, it was a more convenient, and for some individuals very profitable, notion.

Then we'd better address the uneven flow of money somehow. Letting Chinese investors continue to buy US real estate is a big part of that.