Chinese buyers unlikely to invest in foreign property next year

CLSA survey says COVID-19 has negatively impacted buyer intentions of Chinese investors

A survey led by brokerage and investment group CLSA indicated that the unprecedented coronavirus pandemic has driven away Chinese investors, the world’s largest cross-border buyer crowd, from the international property market.

According to the South China Morning Post, CLSA surveyed 1,600 participants across 234 Chinese cities and 82 percent of them revealed that they have no objective in purchasing foreign property in the next 12 months. Around 57 percent revealed that they felt less inclined due to the pandemic.

A team led by CLSA’s Australia property analyst James Druce commented in a recent report, “it appears COVID-19 had quite a negative impact on buyer intentions.”

This detection is incredibly important to all real estate markets as Chinese investors make up the world’s largest cross-border buyer group. As stated by Real Capital Analytics, USD21.7 billion or five percent of the world’s real estate investment activity from January to September of 2020 is accounted to Chinese buyers.

The survey also found that Singapore and Seoul were highly favoured by Chinese buyers due to how geographically close the countries are. Some popular western cities include Paris, Los Angeles, and New York, which are more well-liked than Toronto, Vancouver, and Sydney, cities that are renowned to be migrant-friendly.

More: South Korea foreign ownership increased by 1.2% in first half of 2020

Tensions between Canberra and Beijing have put off Chinese investors in purchasing property in Australia.

The report said, “certainly, the recent breakdown in relations between Australia and China does not bode well.”

The report also added that COVID-19 travel restrictions “have prevented mainland Chinese from travelling to Hong Kong and buying property.” Besides, the city has become less interesting ever since the anti-government protests which began in 2019.

Kashif Ansari, Juwai IQI Group’s co-founder and chief executive, mentioned, “the countries that are first to open to travel, those that have handled the coronavirus well, those that have a strong property market outlook, and those that attract Chinese residents and students will all have significant advantages over other destinations.”

Ansari added, “we believe Thailand, Australia, and Japan will be among the most desirable. I think we will see a boom in Chinese overseas property investing in 2021 and 2022. Credit is cheap, there is an oversupply of stock, prices have fallen in many cases, and the outlook for price growth is excellent.”