As if the economy falling down hard isn't enough, the US received additional troubles from its real estate market. In the third quarter of 2018 alone, Chinese investors in the US sold off their properties, the total amounting to more than $1 billion. CCN stated that the European real estate also experienced a similar situation, where $233 million worth of real estate properties were sold off by Chinese investors as well.
Green Street Advisors director of real-estate research Cedrik Lachance weighed in on this, saying that the decline was expected. It would happen through 2019 as a result of 'pressure from the high Federal Reserve interest rate,' he said, and a natural result of Chinese investors selling off their properties. It was also expected to cause real property to go down in price.
Other analysts weighed in on the picture. Singapore-based analyst Tommy Xie, an economist at Oversea-Chinese Banking Corp, said that 'capital controls' and other schemes were important in controlling the depreciation of the yuan as well as the fall of stocks in the stock market. The problem, however, will take a long time to get over.
With this happening, it appears that the year is going to go well for property buyers. CNBC reported that analysts are expecting home values to get better for buyers, even though they are 5.1 percent higher than November 2017 values. Asking price queries are also becoming slower, as more buyers are concerned with the rise of interest rates as well as affordability becoming lower and lower.
More investors selling their stock of US property market assets means that the market is flooded with property surplus, with listings bearing prices that are lower than the market standard. It doesn't help that only last spring 2018, more than half of the US housing markets were posting prices that had been labelled as 'overvalued.'
The dispute between the US and China notwithstanding, policies have Chinese investors re-thinking their strategies. It's still a long-way from correcting itself, even as hope exists in analysts' idea that the value of US real estate properties will enter an eventual 'correction' by more than half of the year 2019.
This lack of momentum in the property markets could create massive liquidations of mortgages and people unable to pay back the loans that they took out. It could eventually end up in the US market experiencing property market 'bubbles' by a huge amount.
