Chinese Real Estate Investors are Looking for Properties Abroad
When it comes to real estate marketing, all eyes are now on Chinese investors, as due to the prolonged zero-covid policy and a slowdown of economic development in China, they are on the move. Chinese buyers have broken world records in the past year in purchases of property. Now, as many of them leave Mainland China, Chinese property buyers are looking for new real estate properties abroad.
In 2022, China occupies second place in the world when it comes to high-net-worth individuals, with an infamous number of 10,000 individuals leaving the country. Let’s take a look at the reasons for this phenomenon and how foreign investors and property developers can reach Chinese investors.
Why are Chinese investors looking for properties abroad?
As the Chinese economy is rather unstable and doesn’t attract investment in recent years, Chinese investors are deciding to allocate their assets abroad, looking for real estate opportunities in other countries.
According to the Henley Global Citizens Report, China takes the infamous second place in the world when it comes to the number of millionaires leaving the country, reaching up to 10.000 individuals in 2022. First place, obviously taken by Russia is very understandable given the circumstances, but what makes China’s wealth fleed the country?
Unstable economic situation
Due to the prolonged zero-covid policy and infamous lockdown taking place for months in major cities of China, the uncertainty has grown dramatically among wealthy Chinese investors, that want to secure their assets somewhere more safe and more predictable. As the Chinese economy is very unstable right now, Chinese buyers are looking for investment opportunities in other countries, to avoid investment risk.
Chinese people are fed up with the zero-covid policy
Although the situation seems to be changing, as Chinese authorities lean towards releasing restrictions and moving towards opening the country, leaving the zero-covid nightmare behind. But Chinese investors and citizens are fed up, not sure what waits for them next.
According to Bloomberg, relocation inquiries in Shanghai alone, the city that faced heavy lockdowns this year, grew three- to five-fold in spring, compared to a year earlier, and so did inquiries about moving money abroad.
Not everyone agrees with Xi Jinpings’ prolonged reign
Many wealthy Chinese investors are concerned about Xi’s reign and the inquiries in Mainland China and Hong Kong for relocation abroad are multiplying. China seems very unstable in the political sense and many wealthy Chinese prefer to leave and move their assets overseas.
It is said that wealthy Chinese are not only worried about the upcoming official wealth tax that would replace informal ‘common prosperity’ donations. But they are also worried about their personal safety, as the country has recently seen many wealthy Chinese ‘disappear’ from the public, like Jack Ma, the founder of Alibaba Group.
Chinese parents seek good English education for their kids
Emigration for education purposes is one of the main reasons to leave for many years now. According to the Shanghai Academy of Social Sciences, more than 57% of Chinese parents would like to send their kids abroad or relocate, so their kids to get an overseas education. There are millions of Chinese overseas students enrolled in universities in the US, Europe, Australia, and Singapore.
China is a very competitive country and getting to the best universities in the country is a very hard task for over-pressured Chinese teenagers. Many parents want to help their kids by relocating abroad.
Understand Chinese consumers and real estate investors
Chinese investors have not left any of the most expensive properties worldwide, be it the US, Malaysia, Canada, the UK, Australia, or Italy. These countries were the most viewed countries by Chinese buyers in the past year.
The US takes lead and within the US the concentration of Chinese investors lies in the most expensive markets of Los Angeles, San Francisco, Seattle, and New York. According to a study the Chinese have become the biggest investors in US real estate and making overseas assets. Chinese are different because of the high volume of investment and their wide participation in all sorts of property, and their inclination towards the residential property.
They are ready to pay a good amount above the usual home price in the United States. On the other hand, the Chinese are the only overseas investors in the housing markets in the world. Take, for instance, the Chinese investment in Canada. There has been an enormous flow of money from China to Canadian real estate in the last 5 years. It has uplifted the Chinese economy and on the other hand, has raged anger among the Canadian middle-class citizens for whom the prices of property have become increasingly unaffordable.
The enthusiasm of Chinese investors
Chinese investors have outreached the world’s business class by being adventurous. They do not hesitate to invest even in housing markets. This not only opens up their world of investment but also gives the new markets a go. Over the past few years, the Chinese investors have left the analysts knocked out by their choice of location which consisted of abandoned towns and rampant cities.
The nation of savers
A good key to having money in your pocket is to save money. Obviously, you can’t eat the cake and have the cake at the same time. So a common Chinese man believes in the norm of saving. Most Chinese citizens save a quarter to one-third of their monthly income. This is also partially due to their lack of confidence and insecurity regarding the government policies, despite their government doing maximum expenditure out of the budget on health and education.
China is also still working on the ‘one child policy’ so parents also don’t want to burden their children when they get old. That’s another reason they are stingy in their working age and have a lot of saving till the time their kid gets older. That is why the national saving rate of china is more than any other country in the world.
Contribution of Chinese Women
Women make up more than half of the world’s population. But the distinctive feature of the women of the most populous country of the world is that these women are mostly self-made, independent, and rich! Much of the credit again goes to China’s one-child policy which has played a major role in upraising of Chinese women. China has the equal contribution of its female population in the real estate business.
Chinese women are among the wealthiest women in the world, despite the great gender discrimination prevalent in the world’s business community. They make up two-thirds of the richest people in China itself. The richest self-made woman in the world, Zhou Qunfei also belongs to China.
Another important fact about Chinese real estate dealers is that bargaining with them is a bit tricky and confusing. The well-known image of Chinese investors is of rich and affluent people. You don’t really expect much bargaining. Most of the time it is true as they prefer spending a few more million rather than negotiating because they too consider themselves as a part of the global elite. But at the same time, they are free to spend their money as they like.
Chinese investors have the know-how in the real estate industry
Real estate is considered a relatively safe place to invest money for those who have it. And China is the one leading country where people really have the money. The real estate business is the major source of wealth in China and most rich Chinese have made money through it. So they have a sound knowledge of the business of real estate that is better than all others.
Also, Chinese investors have mastered the art of creating benefits where they actually may not exist which means that they know how to taper the ends to their own needs.
Lastly, China is a very enthusiastic nation. It has the most hardworking men on the earth. An average Chinese work 12-16 hours a day. But they also like to balance things out. They equally want to give themselves time to relax, which is why they are also interested in beautiful places on earth. This also accounts for their interest in an overseas land.
How to attack Chinese real estate investors?
The best way to attract Chinese and foreign investors is online. Chinese, more than any other nation in the world, is very digital and checks everything online. Let’s see the best ways how to reach out to Chinese real estate investors.
Create a Chinese website and focus on good Baidu SEO
The first place Chinese people check for information is Baidu, the Chinese equivalent of Google. Therefore, it’s important to have your own website hosted in China, so that Baidu will rank it higher in its search result pages.
Try to work on your search engine optimization, including keywords and backlinks, so that you will become more visible in the search results. You have to know that 75% of all property and investment research is carried out via Baidu. We also advise you to offer a contact form and live chat, so that Chinese investors will be able to contact you and get answers fast.
Take care of your e-reputation
Good reputation and branding are very important in China, as Chinese people don’t trust companies and brands they never heard of. This is why it’s advisable to participate in online forums and communities centered around real estate.
Try participating or starting your own topics in Zhihu, Baidu Zhidao or Baidu Tieba. You will get to know the needs of your customers, promote your brand and also help your Baidu ranking, as people will mention you.
Promote your real estate on Chinese social media platforms
Every company that doesn’t have a social media account in China isn’t considered trustworthy. The main social media platform to consider is WeChat, where more than 1.26 billion people log in on a monthly basis. Wechat offers many great features for companies, like official accounts, different content formats, a customer management system, and your own mini-programs, where you can offer an interactive brochure.
An H5 brochure is a great way to show your property in a virtual tour, present all the options and attract your audience with great photos. Those brochures are also very shareable, so you can send them to individuals, in WeChat groups, or promote them on other social media platforms.
Apart from WeChat, depending on your real estate type, you can also promote your properties on Weibo, Xiaohongshu or Douyin, which are also very popular in China nowadays.
Need help reaching out to Chinese real estate investors? Contact us!
It only leaves us enthralled, by how China is not ready to miss any overseas investment opportunity and where will its quest for outbound real estate marketing brings it next. In any case, for us, it is really difficult to compete with Chinese buyers in the international real estate market.
If you need help reaching out to Chinese investors, leave us a comment or contact us. We have worked with many real estate companies over the years, helping them attract investment from Mainland China. Now it’s your turn!