For the first time,
the Chinese have become the biggest foreign buyers of apartments in Manhattan,
real estate brokers estimate, taking the mantle from the Russians - whose
activity has dropped off since the unrest in Ukraine and
the imposition of sanctions against Russia by
the United States.
Wealthy
Chinese are pouring money into real estate in New York and some other major
cities around the world, including London and Sydney, as they seek safe havens
for their cash and also establish a base for their children to get an education
in the West.
Reuters
asked five of the top real estate brokerages for their ranking of foreign
buyers in New York City. The Chinese ranked first in both volume and value of
sales in all their estimates. Opinions differed on just how the Russians,
Europeans and South Americans stacked up next.
There are no
official figures collected on the national and ethnic backgrounds of home
buyers because of U.S. fair housing laws, designed to protect against
discrimination.
The Chinese
interest is mainly a valuation play, real estate experts say. After the U.S.
housing bust in 2007-2010, home prices in major U.S. cities fell to levels that
made them attractive. While U.S. prices have been recovering, they are still
appealingly low by comparison with many other parts of the world.
Many Chinese
buyers are switching their interest away from markets like
Shanghai, Hong Kong and Singapore amid fears that prices have soared to frothy
levels in those cities. Hong Kong has the second most expensive housing
market in the world, behind
Monaco, with Manhattan trailing in sixth place, according to British real
estate research firm Knight Frank.
The brokers
say that many Chinese buyers are also investing abroad so they can own property
near major educational institutions. Some are buying homes near top colleges —
even though their children are so little they can't walk yet. More than 80
percent of wealthy Chinese want to send their children overseas to school,
according to the Hurun Report, a Shanghai-based publication.
"By far
and away, the Chinese are the fastest growing demographic," said Dean
Jones, a U.S.-based broker with Sotheby's International.
"They are the top consumer for real estate, and New York is front and
center."
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