An extended visa to visit the United States will attract more mainlanders to buy homes there despite the recent slowdown in US home price appreciation.
The Chinese are already the largest or the second-largest group of foreign property buyers in 46 of the 50 states, according to the National Association of Realtors in the United States. Its data shows Chinese investors spent US$22 billion on US real estate, or nearly a quarter of all international sales, in the year to March 2014.
Adding to this strong trend is an agreement signed by Barack Obama and Xi Jinping in November that provides citizens of both countries access to 10-year tourist and business visas, eliminating the hassle of annual renewal.
“It will make a trip much easier. One just needs to buy a ticket and pack,” said Tony Huang, managing director of Shanghai-based Maxview Realty, which helps multinational firms relocate expatriates to China.
He has visited the United States many times for business and is applying an EB-5 visa, which will eventually grant him a green card if he invests US$1,000,000 to create or preserve at least 10 jobs.
A survey by East-West Property Advisors showed 25 per cent of Chinese respondents said the visa extension would directly translate into speedier purchases of US properties
“I plan to buy (a home in the United States) in the second half of this year or early next year,” he told the South China Morning Post. He prefers three cities on the west coast – San Diego, Los Angeles and San Francisco.
Huang’s top priority is education for his seven-year-old son. He wants his son to have a global view, which, he says, is driving his plan to move to the US. Fleeing the pollution at home is the second-most important reason.
A survey by East-West Property Advisors, which helps Asians buy US property, showed 25 per cent of Chinese respondents said the visa extension would directly translate into speedier purchases of US properties while 42 per cent said easier visas would help to a varying degree.
Sam Van Horebeek, the firm’s founder, said a few mainlanders have even decided to buy simply by viewing the videos of the properties.
Huang, however, prefers on-site visits with his son and wife. “It will be for self-use,” he said.
“We will visit the three cities for about a week and live with friends. We’ll then seal the deal. US$1,000,000 is in any case not a big deal if you consider home prices here in Shanghai.”
While small mainland cities are still mired in a downturn due to a serious housing glut, top-tier cities such as Shanghai and Beijing have shown some signs of recovery in recent months.
On the other side of the Atlantic Ocean, US single-family home price appreciation slowed to its weakest level in more than two years in November as lean inventories and tight mortgage standards limit housing market activities, according to the S&P/Case Shiller composite index.
San Francisco continued to lead all 20 metropolitan areas with a year-on-year gain of 8.9 per cent, while the average gain slowed to 4.3 per cent in November.