A recent Property Report in Wall Street Journal explores the impact that China government-issued capital controls are having on Chinese investors, using insight from Realogics Sotheby’s International Realty broker and Asia Services Group member Dehlan Gwo for his expert insight. As the article reads, “individuals have long faced curbs on overseas investments, but have figured out ways around such limits.” Will the same be said for buyers facing the latest round of controls?
Historically, WSJ notes that “Chinese individuals have long faced limits to overseas investments equal to about $50,000” but over the years, savvy investors have simply found ways to work around the restrictions. This means there is typically a cycle in which outflows are curbed for a short period of time, until a solution is found. Thus, with the latest restrictions, investors have “become more selective in their investments and are steering clear of splashy deals.”
“People will find alternatives,” Dehlan Gwo tells WSJ, adding that as has happened in the past, “we will see more and more creative ways to move money out of the mainland.”
To be sure, Chinese buyers are making their mark on residential real estate in the United States, as WSJ reports that between March 2016 and March 2017, they represented a “$31.7 billion share of the $153 billion in total sales.” What’s more, is that China’s wealthiest investors have already moved assets into other countries, such as Hong Kong or Singapore, which means their ability to buy overseas will not be curtailed.