Wealthy Chinese look to profit from overseas properties
Staff Reporter 2013-10-01 11:22
A house sold sign in California. (Photo/CNS)
For wealthy Chinese individuals, buying overseas properties has become almost a routine affair. They are now concerned about where to buy, which country can offer the highest returns and how best to avoid tax, the Guangzhou-based Southern Weekly reports.
Due to rising domestic property prices, properties abroad are now actually cheaper than in many Chinese cities, the paper said. With one million yuan (US$163,400), an investor can only buy a property of 25.5 square meters around the area of Beijing's Third Ring Road, but they can buy a 100-square-meter property in an equivalent area in California.
"Any place is cheap, except China," said Zhang Ping, an investor from Guangzhou in south China's Guangdong province. She bought a villa in San Francisco with an annual rental return of 9%, while a house in Guangzhou has an annual rental return of just 3%.
About 70% of Chinese buyers of US properties prefer to live in Los Angeles, followed by New York and Miami. A Chinese investor said he has bought several houses in Atlanta and San Francisco, which can have an average annual return of 8% in rentals, while another investor said buying a house in Sacramento in California has earned an annual rental return of 15%. US property tax plus maintenance fees stand at around 1%-3%, which can be covered by rentals and a small profit can still be made, the investor said.
In Paris, buying an apartment of about €80,000 (US$110,000) and renting it out can earn an annual return of 7%-10%. Portugal has also become one of the hottest overseas investment destinations in terms of property for Chinese investors. Meanwhile, by investing no less than €500,000 (US$675,000), Chinese investors can quickly obtain immigration status.
Australia has yet to offer immigration status to property investors, but it still attracts Chinese investors because of its appreciation potentials. According to related reports unveiled by the Australian government, Sydney's property prices are expected to appreciate 17% within the next three years. The annual rental return in Australia is also very stable at around 5%-7%. Perth, the capital of western Australia, also attracts investors from China with an appreciation rate of 22% within the next three years.
