Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 6 years ago, 07/26/2018

User Stats

3,969
Posts
2,919
Votes
Matt K.
  • Walnut Creek, CA
2,919
Votes |
3,969
Posts

Is China on the Retreat?

Matt K.
  • Walnut Creek, CA
Posted

Will be interesting to see how this plays out as the trade wars heat up, snippet of the article below:

Chinese investors have become net sellers of U.S. commercial property for the first time in a decade, reflecting China’s crackdown on foreign investment and growing tensions between the U.S. and Chinese governments.

After years of binge-buying trophy real estate, Chinese investors sold $1.29 billion worth of property in the second quarter of 2018, according to data firm Real Capital Analytics. During the quarter, Chinese investors purchased only $126.2 million in commercial real estate.

https://www.wsj.com/articles/chinese-real-estate-i...

Account Closed
  • Specialist
  • Paradise Valley, AZ
2,931
Votes |
3,447
Posts
Account Closed
  • Specialist
  • Paradise Valley, AZ
Replied
Originally posted by @Matt K.:

Will be interesting to see how this plays out as the trade wars heat up, snippet of the article below:

Chinese investors have become net sellers of U.S. commercial property for the first time in a decade, reflecting China’s crackdown on foreign investment and growing tensions between the U.S. and Chinese governments.

After years of binge-buying trophy real estate, Chinese investors sold $1.29 billion worth of property in the second quarter of 2018, according to data firm Real Capital Analytics. During the quarter, Chinese investors purchased only $126.2 million in commercial real estate.

https://www.wsj.com/articles/chinese-real-estate-i...

 China is headed for a correction on all fronts. It will affect Australia, New Zealand, Vancouver, Seattle, San Francisco, Toronto the most. China uses a method of "hiding" actual numbers to reflect a  better economy than actually exists. Many Chinese invest in real estate in "empty" cities in China that inflate the value of those properties. It will be a domino effect. 

https://www.zerohedge.com/news/2018-07-24/china-ca...

User Stats

1,517
Posts
811
Votes
Hadar Orkibi
Pro Member
  • Rental Property Investor
  • USA / NZ
811
Votes |
1,517
Posts
Hadar Orkibi
Pro Member
  • Rental Property Investor
  • USA / NZ
Replied

Don't take much note of the NZ news papers @Account Closed, Correction in China will affect the entire world not only theses countries.

  • Hadar Orkibi
  • BiggerPockets logo
    BiggerPockets
    |
    Sponsored
    Find an investor-friendly agent in your market TODAY Get matched with our network of trusted, local, investor friendly agents in under 2 minutes
    Account Closed
    • Specialist
    • Paradise Valley, AZ
    2,931
    Votes |
    3,447
    Posts
    Account Closed
    • Specialist
    • Paradise Valley, AZ
    Replied
    Originally posted by @Hadar Orkibi:

    Don't take much note of the NZ news papers @Account Closed, Correction in China will affect the entire world not only theses countries.

     Nice to meet you Hadar. Actually, it is Zerohedge.com that compiles and integrates the information. I also keep track of Marty Armstrong and Neil Howe who track demographics and birth rates and the velocity of money. They believe things will go well (world wide) for the next year or so and then turn around to a negative. I buy property with the intent of surviving a serious down turn by buying Subject To and selling to Tenant Buyers which protects my long position.

    User Stats

    3,969
    Posts
    2,919
    Votes
    Matt K.
    • Walnut Creek, CA
    2,919
    Votes |
    3,969
    Posts
    Matt K.
    • Walnut Creek, CA
    Replied

    Zerohedge is interesting site... lots of data there.

    User Stats

    509
    Posts
    211
    Votes
    Replied

    China in Freefall.... 🤔. Talk about a house of cards. 

    Behind the scenes Chinese are wondering where it all went wrong?  Hillary was supposed to win. 

    User Stats

    21
    Posts
    6
    Votes
    Nathan Chase
    • Engineer
    • Vancouver, Canada
    6
    Votes |
    21
    Posts
    Nathan Chase
    • Engineer
    • Vancouver, Canada
    Replied

    @Mike M what do you mean by buying Subject To? 

    I live in Vancouver and there is a fair amount to Chinese investing. it'll be interesting to see how the market corrects if that inflow of cash slows or stops...

    User Stats

    3,969
    Posts
    2,919
    Votes
    Matt K.
    • Walnut Creek, CA
    2,919
    Votes |
    3,969
    Posts
    Matt K.
    • Walnut Creek, CA
    Replied
    Originally posted by @Nathan Chase:

    @Mike M what do you mean by buying Subject To? 

    I live in Vancouver and there is a fair amount to Chinese investing. it'll be interesting to see how the market corrects if that inflow of cash slows or stops...

     Subject to is using the existing loan....


    Also, what's Vancouver like for job market? I know here in Bay Area (CA) while there's definitely foreign money.... there's also plenty of domestic money being thrown at houses and low supply. I in a sense wonder if it'll help more homes sale and prices remain similar...

    User Stats

    21
    Posts
    6
    Votes
    Nathan Chase
    • Engineer
    • Vancouver, Canada
    6
    Votes |
    21
    Posts
    Nathan Chase
    • Engineer
    • Vancouver, Canada
    Replied

    no one knows exactly the extent of Chinese money on the vancouver housing market. The job market is stable but wages have largely stagnated and not kept up with cost of living. The housing affordability crisis means that lower paying jobs are having a hard time keeping employees. Restraurants and retail can't attract employees and keep them in vancouver. This spells difficulty as either wages will increase, further pushing up cost of living for everyone or these businesses will have to close or move. 

    in my humble opinion.

    User Stats

    53
    Posts
    18
    Votes
    George Lay
    • Rental Property Investor
    • Vancouver, British Columbia
    18
    Votes |
    53
    Posts
    George Lay
    • Rental Property Investor
    • Vancouver, British Columbia
    Replied

    I think @Nathan Chase is right in his observations. There's always added pressure on businesses to want to pay less but the market will dictate who is going to work those jobs. I would imagine being understaffed is the new normal if businesses want to stay in Vancouver proper. The extent of Chinese money is also unknown because we don't actually track the flow of money coming into the country. Having said that, I would place more of the blame on the real estate market self-reinforcing the current environment where property values increased and banks were willing to lend on higher values which led people suddenly being able to access more money which in turn led to more money being spent on buying real estate. Money from Asia was just the catalyst. 

    Although there is concern about China's economy, I don't know know if there is a free fall scenario because the average consumer in China uses a lot less credit that the average US/Canada consumer. It seems to be merely 1 billion people finally having cash to catch up on consumer spending habits that we've been accustomed to for the last 50+ years in North America. I think there's still quite a gap for China to make up in terms of consumerism before they finally catch up us. 

    User Stats

    3,969
    Posts
    2,919
    Votes
    Matt K.
    • Walnut Creek, CA
    2,919
    Votes |
    3,969
    Posts
    Matt K.
    • Walnut Creek, CA
    Replied
    Originally posted by @Nathan Chase:

    no one knows exactly the extent of Chinese money on the vancouver housing market. The job market is stable but wages have largely stagnated and not kept up with cost of living. The housing affordability crisis means that lower paying jobs are having a hard time keeping employees. Restraurants and retail can't attract employees and keep them in vancouver. This spells difficulty as either wages will increase, further pushing up cost of living for everyone or these businesses will have to close or move. 

    in my humble opinion.

     Are there not cheaper areas that are commutable? In the SF Bay Area it's expensive so lower wage earners typically commute into the city and can spend up to a few hours each way doing so. It's also in other areas of the states as well.

    https://www.apartmentlist.com/rentonomics/increase-in-long-super-commutes/

    User Stats

    10
    Posts
    1
    Votes
    Devin Garrett
    • Modesto, CA
    1
    Votes |
    10
    Posts
    Devin Garrett
    • Modesto, CA
    Replied

    Due to all the tariffs and government sanctions it may be more cost effective for these foreign investors to use their properties for production and assembly.  If anything commercial properties may see an increase in prices , it's still a bit too early to tell.

    Anyone else thinking the trade war could spark an early correction in some markets?

    https://www.cbsnews.com/news/how-u-s-tariffs-may-r...

    User Stats

    192
    Posts
    68
    Votes
    Troy Williams
    • Rental Property Investor
    • Florida & Shanghai
    68
    Votes |
    192
    Posts
    Troy Williams
    • Rental Property Investor
    • Florida & Shanghai
    Replied

    Many good points here.  While the trade war could escalate to unprecedented heights, I have seen little else to show that China will have any sort of free fall.   I've heard similar fears and predictions for over 15 years...including the global recession almost 10 years ago, yet all the while living here, I've experienced quite the opposite.   I'm convinced the economy that continues to plow it's way forward is a completely different animal than the economy we know and understand back home in the states.   Stay tuned for more of the unexpected...

    BiggerPockets logo
    Join Our Private Community for Passive Investors
    |
    BiggerPockets
    Get first-hand insights and real sponsor reviews from other investors

    User Stats

    4,353
    Posts
    1,722
    Votes
    Sam Shueh
    • Real Estate Agent
    • Cupertino, CA
    1,722
    Votes |
    4,353
    Posts
    Sam Shueh
    • Real Estate Agent
    • Cupertino, CA
    Replied

    Most likely a mis- interpretation in financial sources. If there is a slowing in US commercial transaction it is likely these US commercial properties are over valued. These llc can be Chinese government investment under a faux US firms. About 1/3 Chinese millionaires will eventually pack and migrate overseas to metropolitans to US or Canada coasts.