With its citywide average property costs of $470 per square foot, the New York City real estate market is a serious game that only true contenders dare to get involved with. But a new study shows that it’s not just Hollywood celebs and millionaire pop stars gobbling up pricey property in Manhattan — it’s the Chinese.
In fact, foreign Chinese investors have never had an easier time connecting to agents here in the U.S., and a big part of that is because of social media. Some real estate agents talked to Reuters and said their investor clients instructed them to buy incredibly value plots of land in places like Texas and Colorado for them “sight unseen.” But the biggest gains were made in Manhattan, where Chinese investors have now overtaken Russian buyers as the biggest buyers in the city.
The real estate consultancy Savills reported that 2013 saw a total of $13.5 billion invested by the Chinese in overseas property. If that’s not staggering enough, 2012 only saw $6.3 billion. So what’s prompted investors to cross the Pacific? Cooling real estate prices in Hong Kong, according Reuters, with luxury homes in Manhattan averaging $2,000 cheaper than those back in the Chinese city.
As we mentioned before, these trends wouldn’t be the way without social media — but why? It’s not Facebook and Twitter we’re dealing with here, but a new generation of messaging apps that allow investors to connect with agents almost instantaneously. Take WeChat, for example, an app that allowed Manhattan agent Ryan Serhant to sell two properties worth a combined $13 million to one investor all the way across the world. Other platforms like QQ and Weibo are making it easier than ever before to begin the process, especially when they’re used by the 20-something heirs of wealthy Chinese families.
Though these are investors we’re talking about, we’d be lying if we said there was no element of celebrity involved with such audacious property purchases. For proof, look no further than the case of Zhang Xin, who’s currently serving as CEO for SOHO China, a prominent Beijing-based real estate giant. She outbid Brad Pitt, Leonardo DiCaprio and a Saudi prince in order to secure her Manhattan mansion worth an estimated $26 million.
All this brings up a few important questions. Namely, will advancements in the way property is bought affect the domestic real estate markets as well?
“This is probably because interest rates are so low,” says explains David McChesney, Realtor and GRI with The Keyes Company. “Banks and CD’s are not a good option. People are just wasting time. If you’re looking for a great short term investment, the housing market is the way to go.”
At the end of the day, it’s undeniably a numbers game, not a land game. Just ask Frank Hu, an agent who works through Sofun.com’s U.S. website. “Clients don’t need to visit the land before buying; there’s nothing to see about land,” he tells Reuters. “We only need to provide clients information like its location and price.”