Institutional investors from out of China led the way in foreign investments as Chinese investment properties received $2.7 billion worth of funds. Chinese commercial real estate were especially hot properties during the first quarter, according to The Wall Street Journal. Foreign investors are coming back to the country to buy despite the troubles cast by the US-China trade dispute.
Investors come from the US and Switzerland, with some also entering from Bahrain and Singapore. These institutional investors bought $2.7 billion worth of Chinese commercial real estate during the first quarter of 2019, according to analysis from Real Capital Analytics.
It was also the biggest in a series of foreign purchases since Real Capital started their analysis of data related to this sector in 2007. Foreign interest actually showed a reversal from the trend that prevailed in the period between 2013 to 2018, when most investors were net sellers. They were off-loading properties instead of buying them at that time.
Investors were driven away by what they perceived to be a "property-market bubble," which was also made complicated by the disputes China found itself under. It didn't help that cheap financing from the government also approved cheap financing to Chinese buyers.
It's not the same for New York, though, as Chinese buyers have started to move away from New York's glitzy properties. More importantly, it's the Chinese government giving encouragement for them to do so, as they are looking to keep the money flowing within the country, according to reports from Financial Times.
This has been cited as the reason behind a massive sell-off of Chinese-owned foreign properties.
These have been good assets to go by, but the country needs the money, and therefore, its nationals have been selling office towers and residential buildings from the US, London, Vancouver, and other territories where their properties are.
To be clear, the Chinese pullback didn't add to NYC's list of problems, if any, but it has effectively lost a lucrative "client." Sales in the city have been led by Chinese investors looking for assets.
No one feels the pullback more than the luxury tower owners, who find their glitzy apartments with no owners, and the brokers, who can no longer rely on Chinese investments to boost their own portfolios, as well.
The trouble can be traced back to the US, as well. With Trump's punitive trade tariffs in full swing, China must find ways to keep the economy up for its citizens. The localization of money flow may be the ultimate effect of Trump's self-defeating policies.
