According to a report published in 2011 by the Bank of China and Hurun, it was stated that up to half of China’s mega rich (those with at least US$16 million in the bank), were considering emigrating.” It is also clear that China’s middle class are also finding their feet in terms of investments and rapidly expanding their portfolios to include property brought in overseas countries.
Chinese investors’ most popular offshore residential property destinations include the United States, Canada, Australia and the UK. Housing prices in the UK have increased 177 percent over the past 15 years, with London prices up about 276 percent. This fact has not gone unnoticed by property developers and property agents who are scrambling to target Chinese buyers. Many are turning to engage Digital Agencies and employ digital marketing campaigns to develop their China awareness and try and develop a mindshare about a particular location.
What Is Driving This Trend?
In an article posted by Opp Connect it was stated that, “Investment volumes could conservatively continue to grow at 20% per annum over the next decade. A key driver for Chinese to purchase overseas properties stem from the actual location itself such as: Educational systems, Location, Community,and Legal Obligatations.
Long Term Investment
The main driver is long term investment. “Chinese buyers’ global presence is fueled in part by a strong yuan and slowing domestic economy, both of which are encouraging Chinese investors to look further afield in an attempt to diversify their investments,” Knight Frank said in a report recently released. The Chinese investors are looking for long term investments in order to protect their assists. The government cool down of the property market in China’s major cities has led many investors to look outside of China for new investment opportunities. According to China Economic Review, “Most Chinese are on the hunt for investment bargains in the debt-ravaged region, not because they want to live there.” They are looking for investments that will yield higher returns. Property in an economic resurgences area is considered valuable to the overseas investors.
Another factor affecting the global demand is foreign educational systems. Many middle class buyers are looking for property near well-known universities that their children will attend. One way to attract overseas investment is to highlight your areas schools and universities. “They often come here to buy for their children because many of them study here so they would love to have an apartment so they would know where the child is going to stay,”Mr Triguboff said.
Along with educational systems, Chinese investors are also looking for prime real estate located near major transportation hubs. If your property is near a major airport or train depot be sure to make a note of this when attracting Chinese investors.
Education and Location play an important part in Chinese investors’ decisions but for the Chinese looking to immigrate to another country, community plays an even bigger role. It is imperative to understand your buyer before you market your property. If the investor is only looking for investment opportunities, than community doesn’t affect their buying decision. But if they are looking to immigrate having a strong Chinese presence in the area is a major factor.
The last thing we will cover is Legal Requirements. The Chinese government is placing new restrictions on purchasing property and these restrictions are fueling the international demand. According to The Australian, “The strong state of the Chinese property market pushed the national government to impose dramatic curbs in an attempt to halt potentially dangerous overheating. The biggest change was to cap investors’ holdings at two properties, while in some cities residents are required to have lived there for at least three to five years before they are allowed to buy.” These along with increases in down payments, 50% now, are causing many Chinese to explore the overseas markets. For marketers, it is important to understand your country’s policies on overseas property investment and also to understand the Chinese policies on property investment in China and overseas.
The final outlook is strong, with 540 million Chinese expected to enter the middle class by 2020, now is the time to invest in marketing strategies that will attract and retain overseas investment. There are many reasons why the Chinese are interested in overseas property markets and understanding who, what, why and when will give you an edge in attracting these willing buyers. These purchases of overseas property are digitally savvy so this makes them an ideal audience for reaching them with a digital marketing program.