Here’s a summary of potential future actions by Chinese investors with the recent spate of volatility in the financial markets.
According to Jonathan Miller, president of appraisal firm Miller Samuel, the tumult in China may lead to even more money finding its way into American residential and commercial real estate.
“There are not a lot of investment vehicles in China,” said Miller. “You have the [Chinese] housing market, which is a pretty significant bubble. You have thousands of ghost cities that have been constructed. On top of that, you have a pretty volatile stock market situation. So there is some speculation that there actually will be outflow as a result of this and maybe that will end up in the U.S.”
Costello concurs with Miller, noting that China’s insurance companies have been allowed by their regulators to invest in foreign real estate only since 2012.
“Unless and until they have to cover losses at home, they’re not going to sell these properties,” said Costello. “They’re going to hold them for the long term.”