The current stock market turmoil in China will at best have no impact on Chinese buying international real estate, while many real estate agents dealing with Chinese buyers think that country’s stock market decline last month will actually see more Chinese buying overseas real estate.
In a survey carried out by Chinese overseas property website juwai.com at the height of the turmoil last month, 75 percent of surveyed real estate agents said they thought there would either be no impact or an increase in the number of Chinese looking to buy property overseas.
More than half – 59 percent – said the world would likely see more Chinese property buyers, while just 14 percent said they felt the stock market plunge would result in less overseas property purchases from Chinese buyers.
The survey included agents around the world who work primarily with mainland Chinese buyers of international property. Of agents in mainland China, some 48 percent believed the impact would be more investment while only 4 percent felt it would mean less.
A flight to safety, or diversification in favor of stability and better returns, was the most common reason both sets of agents gave for the expected increase in international property investment.
Simon Henry, co-Founder of Juwai.com, told Dot Property Group: “Last year, China’s stock market began to look like a credible alternative to other investment categories, like property. Many investors now believe the stock market has lost its credibility as an alternative to real estate.
“With the domestic stock market so unpredictable, international real estate looks like a better investment.
“I wouldn’t call it capital flight so much as a search for quality.
“Many wealthy Chinese are self-made and have most of their assets tied up in their own company. For anyone in that position, it is prudent to diversify both internationally and into other types of assets like property.”
