patrick.net

“Harsh has been covering financial markets on CCN since 2019. He has also written for other reputed publications such as The Motley Fool, TheStreet, and Seeking Alpha, and gets regularly featured on Yahoo! Finance. Harsh is based out of Indore, India.” - This guy is clueless. Nuff said.

Chinese investor pull out of US housing market? Still need to get the cash out of China, and may even need a place to get away from the virus,

HeadSet says

Chinese investor pull out of US housing market? Still need to get the cash out of China, and may even need a place to get away from the virus,

I bet as the crisis deepens China side the capital controls will become...totalitarian in the extreme. As in bankers who transfer money out of China will be publicly shot live on TV.

So forget about cash leaving China like before.

I remember reading that 7% of Bay Area housing is purchased with money coming abroad. Wonder what China makes up of that?

Even if Chinese stop speculating on Bay Area housing and house prices drop in half, houses will still be extremely expensive / overpriced.

I know commodities like copper and oil are going down.

http://www.financetwitter.com/2020/02/get-ready-for-us-dollar-40-oil-price-opec-plan-to-cut-an-extra-500000-barrels-fails-to-stop-coronavirus-panic.html

But I see where some may claim the coronavirus would create a global economic panic, but I don't think Chinese foreigners own more than 5% of US residential real estate. Maybe it would have less impact on real estate, and more on Chinese investors pulling their money out of the international stock markets.

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"In 2014, China supplanted Canada as the source of the largest share of foreign buyers of U.S. residential real estate, according to data from the National Association of Realtors. In 2018 dollars, Chinese buyers accounted for roughly 25% of total foreign investment in U.S. residential real estate. marketwatch.com May 16, 2019"

AD says

but I don't think Chinese foreigners own more than 5% of US residential real estate

It might not be as simple as that. I know people from China living and working (legally) here in silicon valley that pool money from friends and family in China to buy places here. That's a type of "foreign buyers" that wouldn't really count in your 5% statistics. But, that would dry up if China clamps down harder on money transfers. It would also slow housing speculation is people in China were more concerned about the short-term problems of corona virus; but that, at least, would resume when the pandemic subsides.

When the SHTF, cash is king.

A girl told me once that when Chinese pull out, you can't tell.

Article is ridiculous speculation, perfect for CNN. Or, a crude attempt to sway the markets on rumor for an investment sortie. Also perfect for CNN.

SunnyvaleCA says

AD says

but I don't think Chinese foreigners own more than 5% of US residential real estate

It might not be as simple as that. I know people from China living and working (legally) here in silicon valley that pool money from friends and family in China to buy places here. That's a type of "foreign buyers" that wouldn't really count in your 5% statistics. But, that would dry up if China clamps down harder on money transfers. It would also slow housing speculation is people in China were more concerned about the short-term problems of corona virus; but that, at least, would resume when the pandemic subsides.

Good point, but yes the 5% statistic is based on 100% foreign investment, and not "mixed" or foreign-domestic investment.

But I suspect if there is any panic the Chinese foreign investors would first withdraw from their stocks and bonds portfolios and deposit the proceeds into checking and savings accounts.

Housing naturally does not offer the liquidity for a panic / quick sale.

AD says

Housing naturally does not offer the liquidity for a panic / quick sale.

The lure of having a property is that it's seen as much more stable, thus reducing the "panic" part. Also, it seems that some Chinese, apparently, don't understand this whole "property tax" thing... you mean you buy a property and then pay $20k/year "rent" to the county tax assessor's office — might as well live in an apartment!

SunnyvaleCA says

Even if Chinese stop speculating on Bay Area housing and house prices drop in half, houses will still be extremely expensive / overpriced.

Lol, so true!