Photo: Diane39 / Getty Images / iStockphoto
Just before the COVID-19 pandemic began in March 2020, Stephen Jiang, who lives in Ningbo, a coastal city in southeastern China, was considering buying a home in New York. A father of two who made a good living as a shipping company owner wanted to do what many upper-class Chinese parents have: he planned to move with his family to the United States in a few years so that his teenage daughters could study in America. … boarding schools. So he contacted a broker from New York, whom a friend had introduced him to before the pandemic.
But that summer, a friend who had lived in New York for two years fled back to China. He told Jiang that this was due to what appeared to be a losing war against the virus in the US, the riots that accompanied the Black Lives Matter protests, and the rise in violent attacks against Asian Americans. Now Jiang has shelved his plans to buy in the city. “The pandemic has highlighted many negative characteristics of the United States that I had not previously suspected,” he said.
Over the past six years, home hunters like Jiang have made China the top international source of US home buyers. But this year, the Chinese have dropped to third place behind Canadians and Mexicans, according to the annual rankings. survey overseas home purchases issued by the National Association of Realtors (NAR).
While New York is still one of the top three destinations in the US for Chinese buyers, the real estate business is seeing a decline in their interest. “At the start of the pandemic, I had a lot of leads and then they all left,” said Chloe Ren, founder of the Chloe Ren Group, a New York-based luxury real estate agency that specializes in Chinese buyers. While anti-immigrant rhetoric from the Trump era and pandemic travel restrictions scared off foreign shoppers in general (NAR research found that the share of foreign shoppers fell 31 percent last year), Ren said that was not all for Chinese shoppers.
Just ask Yi Luan. At the beginning of the pandemic, the Beijing native, who first came to the United States to study at New York University, had been working in New York for four years and was planning to buy an apartment in the city. But last fall, she packed her things and returned to Beijing for good. In a blog post that went viral in China, Luan detailed the many reasons for her decision, including the Americans’ refusal to disguise themselves, Trump’s proposed ban on Chinese social media platform WeChat, and the extremely long wait for a green card. “When I studied in the US, the distance between the two countries was about 100 versus 70, and now it is about 100 versus 90,” Luan wrote. “It really isn’t worth sacrificing so much to stay in the US just because of the ten point difference.”
For people living in China, this negative perception of the United States can be even harsher. “Chinese media plays out both American anti-Asian sentiment and gun violence,” said Georg Chmiel, co-founder and executive chairman of Juwai IQI Group, a real estate technology portal that promotes global real estate to Chinese buyers. The news is particularly troubling in a country where private gun ownership is prohibited and anti-Asian attacks are rare. “Personal safety is an important criterion for Chinese buyers, even more so than for buyers from other parts of Asia,” added Khmiel. Perhaps the most concerned group? Parents. “Families with safety concerns can send their children to study in Singapore, Australia or the UK rather than the States,” Khmiel said. And that will make a big difference given that China is the largest source of international students in the United States, with a total of 372,000 before the pandemic. Some parents bought properties for their children when they were young.
Fearing the absence of Chinese buyers for some time, some developers changed their tactics. Strategic Capital, a subsidiary of a Chinese public corporation, along with US developers Cape Advisors and Forum Absolute, initially promoted Greenwich West, a 169-unit luxury condo in Greenwich Village, to Chinese buyers in 2018. But she has focused entirely on selling American residents ever since. This strategy paid off: by the end of the summer, it was assumed that half of the building would be sold mainly to local residents (only ten units were sold to Chinese buyers). “We are a Chinese company. We understand the Asian shopping market, ”said Philip Gesu, Development Director at Strategic Capital. “But at the end of the day, this project is actually a Soho Tribeca West Village project.” He doesn’t expect Chinese buyers to return to the New York market anytime soon. “It’s over,” Gesu said.
It was just over a decade ago, in 2009, when the mere presence of Chinese home buyers was an event in itself. When SouFun, a major online real estate portal in China, invited 21 Chinese billionaires to tour the United States in search of homes, they visited six cities in ten days in search of lucrative deals left over from the 2008 financial crisis, and reporters chased them every step of the way. their trips.
Shopping really took off in 2014 when the United States began granting ten-year tourist visas to Chinese citizens instead of one-year ones. Meanwhile, Chinese developers and investors have made headlines buying tents in New York, such as the $ 725 million purchase of Fosun One Chase Manhattan Plaza in 2013 and Anbang’s takeover of Waldorf Astoria for $ 1.95 billion in 2015. which is a record figure for an American hotel. But when Beijing tightened restrictions on the withdrawal of money from the country at the end of 2016, Chinese developers began to sell their properties. Others were forced to default on their loans and face foreclosures.
However, before COVID hit the US, individual Chinese buyers found ways to bypass currency restrictions and spent $ 11.5 billion buying 18,400 homes in 2019, more than buyers from any other country. Unlike the pioneers of the early 2010s, who would spend $ 10 million or more in cash on a beacon property to raise their social status, buyers in this current wave are more likely to be part of the global elite, people who have studied in the United States and may be working as CEOs of Chinese companies listed here on the stock exchange, said Daniel Chang, head of Sotheby’s International Realty’s field team for Asia. For them, the American home is not so much a status symbol as a practical investment. But last year’s events and riots stifled that enthusiasm.
If Chinese shoppers no longer come, some Chinese Americans will not let them in. “They were so aggressive until 2018. They raised land prices by at least 30 percent, ”said Bentley Zhao, chairman of New Empire, a New York-based real estate development company founded by his immigrant father in 1997. several times when he was bidding against Chinese investors for land in Manhattan. “They seemed to have endless money,” Zhao said. “We use our own money. We could not afford to bargain with the war. “
But it’s not just Sino-American developers who are relieved. According to Tarry Hum, head of the Department of Urbanism at Queens College, it is clear that Chinese developers and homebuyers have transformed neighborhoods for immigrants from China to New York, such as Flushing, Manhattan Chinatown and Sunset Park, with luxury towers, shopping malls. and other projects. As a result, she said, there was “hyper-centrification.” “Once on Prince Street, there were only regular noodle display cases, and the next day, there were brand new upscale businesses selling lots of fancy bubble tea and baked goods, and affordable noodle shops disappeared,” Hum said. “It looks like it’s part of the development vision that Flushing will serve the world’s elite.”
Stephen Jiang, a businessman from Ningbo, is unaware of such tensions. He still thinks that his daughters may one day come to study in the United States. But as for buying a home in New York, he can wait until they actually go to college. “Then I could buy them apartments,” he said. “Who knows what the market will be like years later? And who knows what America will be like? “