Chinese stocks plummet, investors look to U.S. real estate.

Tuesday, September 8, 2015

The Chinese stock market, an extremely volatile entity that has shaken the confidence of many investors, has crashed over 40% since June. While on the surface the trillions and trillions of dollars lost over this timeframe wouldn’t seem to have any impact on American investors and home buyers, that’s not entirely true. Investors in China have begun to look at foreign real estate as a safer way to invest their money. Over the last 12 months, Chinese investors have sunk $29 billion into U.S. real estate, making them the largest foreign purchasers and accounting for over 25% of all foreign real estate sales in the country, according to the National Association of Realtors.

It’s too recent of a trend to draw much data from it in regards to how Chinese investors dipping into the market may affect home prices and finance options for American home buyers, but the sheer volume of Chinese investors looking outside their own country for investment opportunities is something to keep an eye on.

U.S. real estate has proven itself to be a potentially very lucrative investment opportunity from both a domestic and foreign prospective when gone about correctly. Foreign investors having more confidence in the U.S. real estate market than markets in their own countries could possibly have major sway on American buyers if these developments continue.  

For now, Chinese investors seem most interested in properties in major American cities, specifically New York. But more foreign interest in U.S. real estate, interest driven by crashes in foreign stocks, could see targeted areas extend beyond major cities. No reason to overreact, but again, it’s something to monitor. When a nation with as many investors as China sees its stock market crash by 40%, the ramifications, at least to an extent, have a global impact.