A New York Home Is No Longer a Dream For Many Chinese Buyers
Photo: Diane39 / Getty Images / iStockphoto
Shortly before the COVID-19 pandemic began to ravage the world in March 2020, Steven Jiang, who lives in Ningbo, a coastal city in southeast China, was considering buying a house in New York. The father-of-two, who made a good living as a transport company owner, wanted to do what many upper-class Chinese parents have: he planned to move his family to the United States in a few years so than his pre-teen daughters in boarding schools. So he contacted a New York broker to whom a friend had introduced him before the pandemic.
But that summer, the friend, who had lived in New York for two years, fled to China. He told Jiang it was prompted by what appeared to be a losing battle against the virus in the United States, the riots accompanying the Black Lives Matter protests, and the rise in violent attacks against Native Americans. Asian. Now Jiang has postponed his plans to buy in the city. “The pandemic has revealed many negative characteristics about the United States that I had not realized before,” he said.
Over the past six years, home hunters like Jiang have made China the number one international source of home buyers in the United States. But this year, the Chinese have fallen to third place, after Canadians and Mexicans, according to the annual report. investigation overseas home purchases published by the National Association of Realtors (NAR).
Although New York is still one of the top three places in the United States for Chinese buyers, the real estate industry is taking note of their waning interest. “I had a lot of potential clients when the pandemic started, and then they all fell,” said Chloe Ren, founder of the Chloe Ren Group, a high-end real estate agency in New York that specializes in Chinese buyers. While the anti-immigrant rhetoric of the Trump era and pandemic travel restrictions discouraged foreign buyers in general (the NAR survey showed that the proportion of foreign buyers fell by 31% year-on-year. last), Ren said that was not all for Chinese buyers.
Just ask Yi Luan. At the start of the pandemic, the Beijing native, who first came to the United States to attend New York University, had already worked in New York for four years and was considering buying an apartment in the city. But last fall, she packed her bags and returned to Beijing for good. In a blog entry that went viral in China, Luan detailed many reasons for his decision, including Americans’ refusal to hide, Trump’s proposal to ban Chinese social media platform WeChat, and the extremely long wait. long of a green card. “When I went to study in the United States, the distance between the two countries was 100 to 70, and now it’s 100 to 90,” Luan wrote. “Making so many sacrifices to stay in the United States just for that ten point difference is really not worth it.”
For people living in China, these negative perceptions of the United States can be even more striking. “Chinese media is highlighting both anti-Asian American sentiment and gun violence,” said Georg Chmiel, co-founder and executive chairman of Juwai IQI Group, a real estate technology portal that promotes global properties to Chinese buyers. The news is particularly alarming in a country where private possession of firearms is prohibited and anti-Asian attacks do not occur frequently. “Personal safety is an important criterion for Chinese buyers, even more so than for those in other parts of Asia,” added Chmiel. Perhaps the most affected group? Parents. “Safety-conscious families could send their children to study in Singapore, Australia or the UK rather than the US,” Chmiel said. And that would make a significant difference, given that China is the largest source of foreign students in the United States, totaling 372,000 before the pandemic. Some parents have bought properties for their children when they are still toddlers.
Concerned that Chinese buyers might be absent for a while, some developers have changed their tactics. Strategic Capital, a subsidiary of a Chinese state-owned company, along with US developers Cape Advisors and Forum Absolute, initially promoted Greenwich West, a 169-unit luxury condo in Greenwich Village, to Chinese buyers. in 2018. But he’s been completely focused on selling to US Residents ever since. This strategy has paid off, with half of the building expected to be sold mostly to locals by the end of the summer (only ten units sold to Chinese buyers). “We are a Chinese company. We understand the Asian buying market, ”said Phillip Gesue, Director of Development at Strategic Capital. “But at the end of the day, this project is really a Soho-Tribeca-West Village project.” He doesn’t expect Chinese buyers to return to the New York market anytime soon. “It’s over,” Gesue said.
It was a little over ten years ago, in 2009, when the mere presence of Chinese buyers was an event in itself. When SouFun, one of China’s leading real estate internet portals, took 21 Chinese billionaires on a home search tour across the United States, they visited six cities in a ten-day blitz. , in search of bargains left behind by the 2008 financial crisis, and have been tracked down by journalists every step of the way.
The buying frenzy really resumed in 2014, when the United States began granting ten-year tourist visas to Chinese citizens instead of one-year visas. Meanwhile, Chinese developers and investors have made headlines buying high-profile New York buildings, such as Fosun’s $ 725 million purchase of One Chase Manhattan Plaza in 2013 and the takeover of Waldorf Astoria. by Anbang for $ 1.95 billion in 2015, a record for an American hotel. But when Beijing tightened its restrictions on the outflow of money from the country in late 2016, Chinese developers began to sell their properties. Others were forced to default on their loans and faced foreclosure.
Yet until COVID hit the United States, individual Chinese buyers found ways to get around currency restrictions, and they spent $ 11.5 billion to buy 18,400 homes in 2019, more than the buyers from any other country. Unlike the pioneers of the early 2010s, who would spend $ 10 million or more in cash on a flagship property to raise their social status, buyers in this current wave are more likely to be part of the global elite, people who have studied in the United States and can work as executives of Chinese listed companies here, said Daniel Chang, Asia head of the field team at Sotheby’s International Realty. For them, an American home is less a status symbol than a practical investment. But the events and turmoil of the past year have largely reduced that enthusiasm.
If Chinese buyers don’t come, some Chinese Americans won’t miss them. “They were so aggressive before 2018. They drove land prices up by at least 30%,” said Bentley Zhao, president of New Empire, a New York-based development company founded by his immigrant father in 1997. La company lost one a few times when it bid on Chinese investors for land in Manhattan. “They seemed to have endless money,” Zhao said. “We use our own money. We couldn’t afford the bidding war.
But it’s not just the Chinese-American developers who are relieved. According to Tarry Hum, chairman of the department of urban studies at Queens College, it’s clear that Chinese developers and buyers have both transformed Chinese immigrant neighborhoods in New York City like Flushing, Manhattan Chinatown, and Sunset Park with luxury towers. , shopping centers and other projects. This resulted, she said, in “hypergentrification”. “One day Prince Street had just mommy and pop noodle showcases, and the next day it’s brand new high-end businesses selling a lot of bubble teas and fancy baked goods, and the affordable noodle shops were gone. “Hum said. “It feels like it’s part of the development vision – that Flushing is going to respond to a global elite.”
Steven Jiang, Ningbo’s businessman, is unaware of such tensions. He still thinks his daughters might one day come and study in the United States. But as for buying a house in New York, he might wait until they actually enter college. “I could buy them apartments then,” he said. “Who knows what the market will look like years later? And who knows what America will look like?
