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June 2017   Volume 43, Number 6      
 

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All-cash Chinese Buyers Disappearing From U.S. Real Estate Markets

In January, financial regulations in China tightened making it more difficult for investors to obtain the funds needed to invest in foreign real estate. These moves by the Chinese government, attempting to curb the massive amount of overseas investment taking place, have started to redefine how real estate deals are being made in the U.S.

Between April 2015 and March 2016, Chinese buyers paid all cash in 71 percent of U.S. real estate deals, while just 20 percent secured mortgages from U.S. lenders, according to the National Association of Realtors.

“They had the ability to pay cash, and they paid cash,” said Alan Rosenbaum, CEO of Guardhill, who said the bank lends about $100 million per year to Asian buyers. “Now, it’s more difficult to move money.”

Previously most large retail banks wouldn’t lend to foreign buyers because of difficulties with complying with “Know Your Customer” regulations. Now several New York City-based bankers have reported that traditional lending to Chinese buyers is on the rise since the January rules went into effect in China.

Despite the Chinese government’s increasingly onerous capital flight controls, the demand for real estate investment from Chinese buyers is expected to climb. According to JLL, Chinese investment in real estate reached a record high of $33 billion in 2016, an increase of 53 percent from 2015.

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In this issue:

Virtual Reality Shakes Up Real Estate

All-cash Chinese Buyers Disappearing From U.S. Real Estate Markets

Consumer Confidence Falls after Record High

Immigrant Households Impact Success of Real Estate Market

Multifamily Construction Loans Are Getting Harder for Developers to Find

Survey NAR Survey Finds Increase in Consumer Confidence in the Midwest and Rural Areas

Purchases of Vacation Homes Declined for Second Straight Year in 2016

Rising Home Prices Drive Up Homeowner Debt

The 10 States Investing the Most in Commercial Real Estate

How Sellers Can Avoid the Downsides of Hot Real Estate Markets


 


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