China may be having the same economic troubles that the United States is having, but groups of Chinese are coming here to buy up some bargains. A trip organized by SouFun Holdings, China’s leading property website company announced a tour to America to buy real estate. The trip was heavily oversubscribed and only 40 will make the tour to buy property in the $300,000 to $800,000 range.
According to the Timesonline: “Mo Tianquan, the chairman of Soufun.com, told The Times that his clients were hardly run-of-the-mill Chinese in a country where GDP per head is about $4,000 a year. “These people are not ordinary members of the masses,” Mr Mo said.He said: “I don’t know how much money these people have. I would say they must have at least a million dollars in cash. That’s cash they can spend any time – not investments fixed already in real estate or shares.”
Mr. Tianquan estimated that at least a third of the group were buying for their children studying in the United States. They are interested in both houses and flats, “properties near universities or high schools and bankrupt homes auctioned by the courts. Usually these houses are only half the price they used to be”
“He said: “I don’t know how much money these people have. I would say they must have at least a million dollars in cash. That’s cash they can spend any time – not investments fixed already in real estate or shares.”
One question is why the Chinese would want to buy in the United States when the yuan is seen as likely to rise further in the long term, thus effectively harming the value of their American property.
Mr Mo said that this was a minor consideration for these members of China’s tiny elite. “They don’t care if the dollar will rise or not,” he said. “They are using pocket money to buy houses. To spend these sums has no impact on their way of life. If it makes a profit, and how much, is not a consideration.”
There is one final hurdle: it is not clear how even the super-rich will get their assets out of China, which limits the amount a Chinese person can take out each year to $50,000.”
Its bargain time in the United State again. Some of you may remember the down turn we had in real estate in the 1980’s The Japanese came over here and bought a huge amount of real estate..They poured nearly $300 billion into high-profile properties like Rockefeller Center in New York and the Pebble Beach Golf Club in California. Do you have a feeling that history is repeating itself? I remember the doom and gloom of those days, everyone thought it was the end of the real estate market. We’ve had several booms and busts in the real estate market since then. The real estate market, like the stock market, will always have it’s up and downs.