Chinese investing in international real estate

Recent reports of Chinese investors increasingly buying international real estate -- particularly in the U.S., could be a bearish sign for the recovery of the residential and commercial real estate markets in the People's Republic.
In addition to investment from entities controlled by Beijing, many individual Chinese are buying homes in the United States. According to a recent article in USA Today:
"Buyers from mainland China and Hong Kong are snapping up luxury homes , often paying cash, in major U.S. cities such as New York, Los Angeles and San Francisco. They're coming by the dozens to buy foreclosed properties in downtrodden cities in Florida and Nevada. Chinese buyers are even starting to snap up pricey commercial buildings and hotels in Manhattan."
'For China, the world is an emerging opportunity,' says Andrew Taylor, founder of Juwai.com, a real estate site based in Hong Kong that was launched in 2011 to match Chinese buyers with U.S. real estate. "We're talking about a huge chunk of people with cash and the desire to invest overseas."

Chinese interest in U.S. real estate rose during the housing meltdown, with plunging property prices making the U.S. a magnet for global buyers. Today, interest is growing as a strong renminbi -- up more than 8% since mid-2010 -- gives the Chinese greater purchasing power. The mainland's restrictions on property purchases also encourages them to look overseas.

An increasing number of Chinese feel that returns will be higher for international real estate than in the People's Republic. There have been reports of recovery in the Chinese real estate sector , but the economic principle of revealed preference manifested by purchases of international real estate says it is not.

With U.S. single-family home prices a third lower since 2006, the U.S. compares favorably with other top markets such as the United Kingdom, Australia, and Canada.

Real estate at home is much easier to manage than that thousands of miles away. Investing in international real estate shows the smart money does not anticipate much profit in China."Great Leap Forward Investments" makes its pitch to Chinese investors in international real estate.