– China’s retirees: an emerging force in global property markets

340 million – that’s the forecasted China’s greying demographic aged 60 and above by 2030.1

That’s an increase of 175 million from the current count of 165 million Chinese retirees1 – a figure that not only exceeds the current population of the US2, but also makes them an emerging force in global property markets that will amount to one of the world’s largest consumer base.

More importantly, this massive market of China’s silver generation has equally substantial funds at their disposal.

Older Chinese are sitting on a hefty share of the $2.4 trillion in savings3 planted in China’s banks4, having lived through China’s boom years, benefited from rising incomes, and capitalised on China’s fast-growing property markets.

Already, their wealth is already impacting global property markets, albeit indirectly. Chinese insurers, custodians of billions of RMB in retirees’ pension and insurance plans, are steadily channelling their cash piles into global property markets, investing $3.1 billion in overseas real estate in H1 20165, and with a further $73 billion expected to follow by 2019.6


China’s silver generation more globally savvy and discerning

Aside from insurers, individual retirees – or those planning for future retirement – are now becoming much more active in global property markets, in part because their horizons are broadening.

The waves of outbound tourists from China, which numbered 120 million in 2015 and is projected to hit 139.2 million this year, are becoming more globally savvy as they get to know more countries around the world, and older generations are well and truly part of this outbound trend.

The China Outbound Tourism Institute estimates tourists aged 60+ accounted for 5 million trips in 20157 and China Britain Business Council estimating a US$34 billion potential spend from this age group.8

In fact, another recent Citi report revealed that outbound tourism by Chinese elderly have skyrocketed as much 217% last year alone.9

Increased awareness of overseas opportunities gives retirees more options to build an overseas lifestyle as well.

57% of Chinese high net worth individuals (HNWIs) prefer to retire in a home of their own, in preference to care homes.10

This is because times are changing, and no longer are China’s rich and wealthy completely adhering to the Confucian ethic of filial piety, whereby Chinese children take care of their elderly parents when they are unable to care for themselves.

Instead, Chinese HNWIs are now in pursuit of independence after retirement, an option that came about due to a growing awareness of the pressures placed upon their children – most who are a single child born under the one-child policy – as well as a desire to not burden them, if possible.11

And for this silver generation, ‘independence after retirement’ translates into living away from their children as they search for relaxed and enriching lifestyles that come hand-in-hand with plenty of travelling around.


Healthcare a top focus for China’s elderly

That said, with China’s dubious environmental quality, many Chinese retirees are on the lookout for an overseas property with access to both top quality medical care and attractive living environments while jet-setting around the world.

In fact, Chinese spent $10 billion on medical tourism in 2015 alone, of which Chinese retirees are an important part of this market – and it’s this growing market that is helping to spur property investment in destinations famed for medical treatments, such as in the US.

50% of China’s HNWIs cited healthcare as their primary concern and main topic of interest for 2016.10

Asides from lifestyle concerns, Chinese retirees are also generational investors who also want to ensure that they are providing for the next generation.

According to research from Bain & Company, Chinese high net worth individuals factored inheritance, children’s education, and life quality as three of their top five wealth objectives.12

With this in mind, an overseas property in a suitable location not only offers a Chinese retiree a unique opportunity to meet their lifestyle aspirations, but also provides both a springboard for their children and grandchildren to enjoy overseas educational opportunities, as well as securing a high-value asset which they can pass on to the next generation.


Connectivity, easier visas, and better pension access broadening retirees’ horizons

Even as Chinese mentality is changing, so is the world to make it easier than ever for Chinese retirees to seek an overseas retirement.

Today, China has become more closely connected with the world, driving what Boeing expects will be a 3x increase in total passengers travelling between China and the US alone by 2021.13

This factor, together with expanding international transport links from China’s lower-tier capitals, will open up many more opportunities for travel, and make it more feasible for retirees to split time between bases at home and overseas.

Countries all over the world are opening their doors to Chinese investors too. Recent moves by Singapore, Australia, the UK, and the US to increase multiple entry visa validity for up to 10 years – plus the raft of ‘golden visa’ residency programs offered by locations such as Portugal, Spain and Greece – all mean that Chinese retirees are now spoilt for choice when it comes to choosing overseas retirement locations.

Interestingly, China’s government is making it easier than ever before for retired Chinese residents living overseas to claim their pensions as well.14 Previously, a convoluted claim procedure meant that many overseas-based Chinese retirees gave up seeking their pensions. However, this policy change now recognises their overseas status, thus giving them greater confidence in supporting themselves overseas.


A greying economy but a golden opportunity

Powerful demographic trends, an increasingly outward looking customer base, and improving links between China and the outside world are aligning to create a high-potential market of Chinese retirees looking abroad for property.

Furthermore, Chinese retirees have money to spend – China’s state-run Research Centre on Ageing forecasts total expenditure by Chinese retirees to reach RMB1 trillion by 2050.15

So agents, it’s time you tailor your offerings to suit China’s older generation. Here are three ways how:

  • Educate them: An overseas investment is a huge step, particularly a Chinese investor with little knowledge of property sales procedures in new countries. So, be sure to manage expectations by including a step-by-step breakdown of a sales process as part of your product pitch, outlining fees and levies clients will expect to pay as part of the process, and explaining terms associated with a property, e.g. freehold, tenancy.
  • Put yourself in their shoes: While they may be commonplace in the UK, US, Canada or Australia, most Chinese – particularly the older generation – haven’t grown up with gardens, garages or pools. So do some research to find out what features may appeal to them, and make sure you put features like this front and center in your pitches to add more allure to your properties.
  • Highlight local facilities: Health and education are a huge concern for China’s silver generation, so be sure to offer details of medical, wellness, and educational institutions in the local area. Chinese investors are looking to tick as many boxes as possible with their property purchases, so pack your pitches with as much relevant information as possible.

Chances are, strategies like these can win you interest, trust, and completed deals from China’s retirement-minded property investors, so good luck with your promotions, and here’s to a golden return from China’s greying economy.



Sources: 1. Brookings Institute: China’s one-child policy at 30; 2. US News: US population in 2015; 3. Naked Capitalism: The puzzle of China’s rising household saving rate; 4. Wikipedia: List of countries by GDP; 5. Fortune: Why Chinese investment in overseas real estate has more than doubled; 6. SCMP: The Chinese are coming: Insurers expected to pour US$73b into overseas properties; 7. COTRI: Elderly Chinese, a market segment of increasing importance; 8. China-Britain Business Council: China’s silver consumers; 9. Citi Report on SCMP: Goodbye tour buses and loud hailers: Chinese tourists now choosing the more personal approach; 10. Hurun Report: Retirement Planning & Healthcare of Chinese HNWIs 2016; 11. Jing Daily: China’s rich opt for luxury nursing homes over filial obligations for aging parents; 12. Bain & Company/China Merchants Bank: China Private Wealth Report; 13. Boeing: Current Market Outlook: 2015-2034; 14. China Daily: Simplified process helps Chinese retirees in US get pensions from overseas; 15. SCMP: Navigating through China’s grey economy the Chinese conquer the hotel industry worldwide?

The Middle Kingdom is a mass market, in the truest sense of the word. With a market volume of 229 billion US dollars, China’s tourism is world champion by now. According to TOPHOTELPROJECTS, the worldwide leading provider of b2b hotel data, more than 700 new hotels with 205,800 rooms are currently in the pipeline in China. In addition, hotel chains such as Jin Jiang increase their investments abroad: After the Louvre Hotels Group acquisition also the stake in Europe’s leading hotel group Accor has been increased now to more than six percent.

-The world has to be prepared for more guests from China: last year 109 million travelled abroad, mostly to Hong Kong, South Korea and Thailand – and to Europe. In the past four years the number of Chinese guests increased by almost one hundred percent on the Old Continent.

Due to their size, Chinese groups become more important – five Chinese hotel groups rank in the top 20 of the largest hotel groups worldwide. With more than 715,000 hotel rooms, Hilton Worldwide remains the largest one followed by Marriott International (714,000 rooms) and on the third place the InterContinental Hotels Group (approx. 710,000 rooms). After the hotel chains Wyndham, Choice and Accor, the Plateno Hotel Groups from Guangzhou in China ranks on the sixth place with about 442,000 rooms. Jin Jiang Hotels from Shanghai (352,000 rooms), which recently brought the European Louvre Hotels Group is on the ninth place.

Further Chinese hotel groups in the top 20 are Homes Inns & Hotels, China Lodging Group and GreenTree Inns. In total 32 Chinese hotel groups rank in the top 300 hotel groups. Even in terms of the world’s largest hotel brands China is one step ahead: “7 Days Inn” by the Plateno Hotels Group is with approximately 380,000 rooms significantly ahead of the previously top-ranked hotel brand Best Western.

Source: TOPHOTELPROJECTS International Property Show in Mainland China

Shanghai Overseas Property & Immigration & Investment Exhibition is the only expo of overseas housing that enjoys the most prosperous reputation in Shanghai. In the aspect of holding property shows, we are the longest running and largest Property & Investment Showcase in mainland China. With over 100+ expos in the 10 years, we have opened our doors to over 3,500 exhibitors, 500,000+ high end investors and welcomed the voice of hundreds of senior level industry experts.

Luxperience 2014 Offers Insight Into Global Travel Trends

Luxperience 2014 opens on 31August with over 300 luxury and high end experiential travel specialists seeking inspiration for new products. The Luxperience worldwide team has put together an overview of what some of these buyers will be looking for according to the trends prevailing in their particular markets.

Michelle Papas Director of Marketing and Buyer Relations of Luxperience says, “There is no doubt that Asia-Pacific is now the engine of growth in international travel both within Asia and also the rest of the world.  The statistics speak for themselves with organisations such as PATA announcing a collective growth of 7% across Asia Pacific. However, we would never suggest that our clients put all their eggs in one basket. Luxperience delivers key buyers from all over the world in ONE stunning location. We have the inside track on key trends in both the US and China to ensure we have the knowledge and recognise opportunities to be able to provide meaningful connections between our buyers and exhibitors.

According to Luxperience’s representative in China Edward Chen, inner Asia remains the most popular destination for luxury experience seekers from China, namely Korea, Taiwan, Hong Kong, Macau, Singapore, Thailand, Maldives, Bali, Malaysia and the Philippines. This insight is further supported by UNWTO findings which cite that in 2013 China, as a source market for Asia, experienced a 30% growth year on year.

For Chinese luxury travellers looking for places further afield, Italy, South Africa, Australia and New Zealand are popular. This aligns with what US luxury travellers are also looking for.

A key trend in both APAC and US markets is experiential travel, specifically adventure holidays. Be it diving with great white sharks or skydiving in far-flung places, it is now the travel experience which is the most critical consideration to the decision makers. Travellers are no longer looking to just loll on a beach, they are looking for special interest components. This is reflected in the number of aspirational adventure products that have already signed up to Luxperience 2014.

Another current trend in the US is parents planning travel experiences with their children. Parents want their children to see things and learn things through travel. They see it as a path to global citizenship.

One key difference between the two markets are the challenges that each faces.

In China, the implementation of the new tourism law, introduced in 2013, means that there are levels of uncertainty, particularly for pre-arranged shopping tours and the availability of optional tours. There has also been a change in consumer purchasing methods – traditional distributors are developing their online capabilities, however with online agents already moving towards mobile technology, online solutions are no longer satisfying consumers’ demands. In addition, competition amongst travel licensed to operate outbound tourism has increased.  With over 1,900 travel agents holding a license and the government approving more year on year the competition is more intense than ever.

“For both China and US, these challenges don’t spell a demise in the tourism industry,” continues Michelle Papas, “instead the industry must be more thoughtful and tourism professionals more creative. Rather than being marketers, tourism officials need to take into account a wide range of disciplines and think out of the box.”

Source:- Luxperience