May 20, 2016
China is now the Number 1 foreign investor in American residential real estate, having made more new investments than Canada in 2015, according to the Asia Society and Rosen Consulting Group’s Breaking Ground: Chinese Investment in U.S. Real Estate. Overall, Chinese residential property purchases in the US between 2010 and 2015 had a cumulative total of US$93 billion (C$129 billion), with the annual growth rate of new investment averaging at 20% during the same period.
This growth rate meant that the flow of new Chinese investment into residential real estate increased from US$11.2 billion in 2010 to US$28.6 billion in 2015. Commercial real estate investment soared even more, with China now the third largest commercial real estate investor after Canada and Singapore, having reached a transaction volume of US$8.5 billion in 2015, far above 2010’s US$585 million. China’s commercial investment flows thus averaged an increase of 70% per year during the period, but were still behind Canada and Singapore’s investment flows in 2015.
The report also noted that China has been the largest source country for America’s immigrant investor program, the EB-5, making up 70% – or US$11 billion – of all investment under that program since 1990. While last year’s US$118 billion in total outbound FDI from China included US$22.3 billion into the US, the study predicts that a need to re-align China’s currency with that of global partners will soon lead to a 6- to 24-month period of increased capital controls, impacting the ease with which Chinese investors can act overseas.