The huge investment potential of the Chinese market is not new news; however, all indications are only a small fraction of the potential has been tapped,
- In 2007 China's commercial property outflow was less than $1 billion. Now it exceeds $20 billion annually.
- Individuals and corporations in China still have an estimated $200 billion to invest abroad.
- Prominent property markets include Hong Kong, Australia, the U.K. and North America,
In 2016, Chinese outbound real estate investments increased by 56 percent, reaching $28.2 billion. China also became the largest cross-border real estate investor, overtaking the United States.
The Chinese have an affinity for property. Additionally, a declining yuan, volatile domestic economy and competitive local property markets are spurring overseas purchases.
According to David Green-Morgan, global capital markets head of research at JLL, Chinese buyers "have access to huge amounts of capital that's been built up over many years. And they are able to deploy the capital quite quickly around the world."
And they are becoming much savvier. As information flow increases, "they become more educated as an investor class," said Fisher (director at Spacious, a Hong Kong-based online real estate platform). He added that with camera surveillance and communication technologies, Chinese owners can monitor their assets remotely in real time. "They're becoming more discerning," he said.
It used to be only ultrahigh-net-worth individuals who bought overseas. Over the last five years, that has changed, as a much larger portion of the population is willing and able, through the growing middle class and the wealth of the nation increasing.
What we read in the newspapers is always about the very wealthy Chinese who come and buy a £5m, £10m, £15m property. But the middle class is key. How big is the middle class? It could be close to 120 million.
In the past, Chinese buyers acquired second homes so their children could study overseas or use it as a means to park cash. Now, though, they are focused on rental income and capital appreciation and have become a more educated investor not only looking at prime London postcodes but widening their search to other cities and areas in the UK.
We have not heard the last of the Chinese investor, instead all facts point to an increased influence on the property market in the UK from the Far East.
Now is the time to invest, as the markets will be pushed higher and higher by this untapped wealth entering the UK market