| HONG KONG, April 25
HONG KONG, April 25 For some Chinese investors,
the first step to purchasing millions of dollars in property on
the other side of the globe is a lot like ordering a new t-shirt
online - search and click.
Social media is the catalyst, connecting Chinese buyers and
overseas agents. At least one prospective buyer entrusted an
agent with $100 million to invest in residential housing. Others
bought houses in Houston or plots of land in Colorado, sight
unseen, according to real estate agents.
In the last six month of 2013, $1.1 billion worth of
potential transactions were referred to international agents by
Juwai.com, the largest real estate portal that targets Chinese
buyers looking abroad. It was unclear how many deals were
As property prices cool in Hong Kong and Singapore, which
have long been magnets for Chinese investment, more money is
flowing to real estate markets such as New York, London and
Sydney. Chinese have overtaken Russians for the first time as
the biggest buyers of apartments in Manhattan, according to real
Chinese buyers invested $13.5 billion in overseas property
last year, compared with $6.3 billion a year earlier, according
to real estate consultancy Savills.
China's social media platforms such as QQ, WeChat and Weibo
are hugely popular among younger property buyers, many of them
20-something scions of China's wealthy families. They are
driving a new phase of Chinese outbound property investment that
is expected to grow 20 percent per year in the coming decade.
"Social media is immediate and familiar to the buyers, it's
a way to connect people without formality and without
introduction. And then you have a little connection," said Joel
Goodrich, a San Francisco-based agent who specializes in luxury
He and his co-worker in New York were referred a Chinese
businessman by Juwai.com at the end of last year. The client
gave them a budget of $100 million to invest in real estate in
New York. They have been communicating over QQ Chat, a popular
instant messenger in China run by Tencent, and the
buyer has made plans to visit the U.S. city to check out his
Juwai.com has also referred clients with budgets of $200
million and A$320 million ($298.93 million) to real estate
agents overseas, according to Andrew Taylor, the property
website's Hong Kong-based co-chief executive officer.
China tightly controls foreign currency transactions.
Individuals can exchange Chinese yuan for a maximum of $50,000 a
year. Chinese companies, however, can buy more U.S. dollars than
otherwise allowed by fake invoicing. Many wealthy Chinese have
made use of corporate and legal entities to transfer large sums
SEARCHING FOR INVESTMENTS
Juwai.com's Taylor said his portal has worked with customers
as young as a 20-year-old student who was studying in the United
States and looking to buy property there for his family back in
Since the website launched 2-1/2 years ago, the types of
inquiries have changed. Where once clients were looking only for
a place to live in the United States, now it's often about
finding a good investment.
"They're asking questions about what's the capital gain,
what's the yield potential, what's it like living here and what
are the taxes," Taylor said.
Goodrich said 99 percent of his clients buy for investment
and they look for yields of around 3 to 4 percent. The top 1
percent are looking for a trophy property.
Soufan.com owned by Nasdaq-listed Sina Corp,
Meiaoju.com and Auproperty.com.au are other marketplaces that
work on a similar business model, acting as intermediaries for
Chinese buyers and overseas agents.
Other domestic and international online agents are also
scrambling to form new partnerships and expand their services.
Earlier this month, U.S. real estate information company Zillow
Inc said it planned to partner with China's Beijing
Yisheng Leju Information Services Co, an affiliate of E-House
(China) Holdings Ltd, to tap growing interest from
Chinese mainland clients, the second-largest foreign buyers of
U.S. homes last year.
Chinese buyers spent $425,000 on average on U.S. homes as of
the end of March 2013, with 69 percent of deals reported as
all-cash purchases, according to Zillow.
Although most buyers prefer to check out properties in
person before buying, some have agreed to long-distance deals.
Gladys Wang, a Chinese agent based in Houston who has more
than 1,400 followers on Weibo, China's version of Twitter, said
she had clients closing deals to buy $300,000 to $400,000
properties without even seeing them.
"Many Chinese are not familiar with Houston, but they learnt
more about the city by following my posts on Weibo," said Wang.
"Nowadays consumers look at reviews before they make a
purchase. Social media is good for this. They have more trust in
me than those who found me through ads, because they have been
following my Weibo, and that speeds up the buying process."
Instead of selling physical properties, some agents opt for
land sales which cost less and close faster.
Frank Hu, an agent listed in Soufun.com's U.S. website,
focuses on selling land in Colorado and Hawaii because the
entry-level investment is much lower at $10,000 to $20,000.
"Clients don't need to visit the land before buying; there's
nothing to see about land. We only need to provide clients
information like its location and price," he said.
($1 = 1.0705 Australian Dollars)
(Additional reporting by Beth Gladstone in NEW YORK; Editing by
Emily Kaiser and Alex Richardson)