The Chinese were the top foreign buyers of U.S. residential property for an 11th straight year, but their investment dropped more than 40% from a year earlier, according to the U.S. National Association of Realtors (NAR). The Chinese spent USD7.5 billion on U.S. homes in the 12 months to March 2024, compared with USD13 billion in the year-earlier period, the NAR data showed. The Association, which has 1.5 million members, groups buyers from the mainland, Hong Kong and Taiwan as Chinese. Overall, foreigners accounted for 2% of the USD2.1 trillion existing U.S. residential market, according to NAR. In terms of volume, Canadians topped the charts, snapping up 7,100 residential units. The Chinese acquired 6,000 homes in the same period, 45% less than the 11,000 bought a year earlier.
The strong U.S. dollar makes U.S. homes much more expensive for foreigners, said Lawrence Yun, Chief Economist at NAR. “Therefore, it’s not surprising to see a pullback in U.S. home sales from foreign buyers.” The U.S. dollar has remained strong against major currencies such as the yuan and the yen because of the higher interest rates in the U.S. The Federal Reserve has maintained its benchmark interest rate in the range of 5% to 5.25% for more than a year, affecting the buying power of overseas buyers. In the near term, the strength of the yuan against the U.S. dollar and residential prices will determine Chinese buyers’ interest in U.S. property, according to Kashif Ansari, Co-founder and group CEO of Juwai IQI, a proptech firm that lists USD4 trillion of properties globally. “If the Chinese yuan gains ground against the U.S. dollar over the coming 12 months like many analysts expect, or if U.S. home prices fall during the same period, we expect to see an increase in the number of Chinese transactions,” Ansari said. More than two-thirds of Chinese and Canadian buyers also preferred to make their investment entirely in cash.
Although the Chinese accounted for fewer units than the Canadians, the Chinese had the highest average purchase price among overseas buyers at USD1.26 million and the highest median price at USD697,900. This was mainly because of Chinese buyers’ preference for properties in traditional destinations such as California and New York, which accounted for 25% and 10% of their total purchases, respectively, according to NAR. These states are arguably among the most expensive places to buy homes, owing to higher average incomes and strict zoning rules that limit new supply there, Juwai IQI’s Ansari said. “In 2024, the U.S. has dropped to the fifth most popular destination for buyers from China, down from second before the Covid-19 pandemic,” Ansari said, adding that it was the No 1 destination about a decade ago. More Chinese money is now heading for South-east Asia, which is closer, and culturally and politically more in tune with Chinese expectations, he said. “And it is more affordable,” the South China Morning Post reports.
