A real estate sign is displayed in front of a house in the Riverdale
area of Toronto on Sept. 29, 2021. (The Canadian Press/Evan Buhler)
Chinese homebuyers are making a comeback in the United States now that Beijing has lifted its "zero COVID" policy, and they're showing more interest in homes and vacation residences than investment properties as they did a decade ago, a recent report found.
"Home purchases from Chinese buyers increased after China relaxed the world's strictest pandemic lockdown policy," said National Association of Realtors (NAR) Chief Economist Lawrence Yun.
The NAR's yearly report on foreign purchases of U.S. residential real estate pointed to an overall dip that it attributed largely to the COVID-19 pandemic and the current lack of U.S. housing inventory. NAR is the country's largest trade association, representing both residential and commercial real estate industries.
Purchases from China dominated foreign buying of U.S. homes in recent months, totaling $13.6 billion.
The average purchase price of these homes was $1.23 million, far higher than the average international purchase ($639,900), the international median ($386,400), and the median sales price of all U.S. home purchases ($384,000)
“For all but three months of the year covered by the report, China was locked down with closed borders, yet Chinese buyers still accounted for one-fourth of the $53.3 billion spent by foreign buyers on a U.S. home,” Kashif Ansari, co-founder and CEO of Malaysia-based Juwai IQI, a property technology company, told the South China Morning Post.
“Only about one in every 10 Chinese buyers is purchasing purely as an investment, which is a big change from the mid-2010s, when wealthy Chinese consumers looked to diversify their wealth out of China.
“In 2023, the typical Chinese buyer is no longer an offshore investor but is on their way towards becoming an American resident and citizen.”
With Chinese buyers out of the picture, the past two years saw a significant drop in foreign purchases.
The last report, ending this March, was 9.6 percent lower in dollars and 14.2 percent down in the number of properties, which NAR says is the lowest since 2009. That's partly due to the housing shortage, and NAR is predicting that it'll rise again in the coming years, especially with Chinese buyers in the market.
"Sharply lower housing inventory in the [United States] and higher borrowing costs across the world have dented international buyers for two straight years," Yun said. "However, recovering international travel following the end of the pandemic will bring more foreign transactions in coming months and years."
Where Are They Buying?
Florida remains the top destination for foreign buyers for the 15th year, with 23 percent of purchases being made in the Sunshine State.
California followed at 12 percent but was the top destination for Chinese buyers (33 percent of purchases), while Texas, North Carolina, and Arizona rounded out the top five.
According to NAR, Florida, Texas, and Arizona have consistently been attractive to foreign buyers, even with potential heat waves and price increases.
The majority (51 percent) of foreign buyers reside in the United States, as NAR's report classifies recent immigrants (less than two years at the time of purchase) and nonimmigrant visa holders as foreign buyers.
It found that 76 percent of these buyers purchased detached single-family homes or townhomes, and 50 percent planned to use the properties as vacation homes or rentals.