According to a recent Reuters article, some Chinese investors begin their property purchasing around the globe, much like they would order a t-shirt online, by simply searching and clicking.
Social media is the catalyst, connecting Chinese buyers and overseas agents. At least one prospective buyer entrusted an agent with $100 million to invest in residential housing. Others bought houses in Houston or plots of land in Colorado, sight unseen, according to real estate agents.
In the last six month of 2013, $1.1 billion worth of potential transactions were referred to international agents by Juwai.com, the largest real estate portal that targets Chinese buyers looking abroad. It was unclear how many deals were actually completed.
As property prices cool in Hong Kong and Singapore, which have long been magnets for Chinese investment, more money is flowing to real estate markets such as New York, London and Sydney. Chinese have overtaken Russians for the first time as the biggest buyers of apartments in Manhattan, according to real estate brokers.
Chinese buyers invested $13.5 billion in overseas property last year, compared with $6.3 billion a year earlier, according to real estate consultancy Savills.
China's social media platforms such as QQ, WeChat and Weibo are hugely popular among younger property buyers, many of them 20-something scions of China's wealthy families. They are driving a new phase of Chinese outbound property investment that is expected to grow 20 percent per year in the coming decade.
"Social media is immediate and familiar to the buyers, it's a way to connect people without formality and without introduction. And then you have a little connection," said Joel Goodrich, a San Francisco-based agent who specializes in luxury real estate.
He and his co-worker in New York were referred a Chinese businessman by Juwai.com at the end of last year. The client gave them a budget of $100 million to invest in real estate in New York. They have been communicating over QQ Chat, a popular instant messenger in China run by Tencent, and the buyer has made plans to visit the U.S. city to check out his options.
Juwai.com has also referred clients with budgets of $200 million and A$320 million ($298.93 million) to real estate agents overseas, according to Andrew Taylor, the property website's Hong Kong-based co-chief executive officer.
China tightly controls foreign currency transactions. Individuals can exchange Chinese yuan for a maximum of $50,000 a year. Chinese companies, however, can buy more U.S. dollars than otherwise allowed by fake invoicing. Many wealthy Chinese have made use of corporate and legal entities to transfer large sums overseas.
The above article was written by Clare Jim for Reuters, and can be read in its entirety by clicking here.