Top 3 Southern California Housing Markets Chinese Are Investing In Now
As Investorist expands their listings to include California properties, every conversation Investorist has had with SoCal developers leads back to Asian buyers - they're the top demographic interested in the geographic and cultural region, snatching up real estate at a rapid pace and pouring tons of dollars into the area's single-family home communities with no signs of slowing, possibly reacting to China's recent relaxed capital controls where they dropped two rules designed to bolster the renminbi (RMB).
Essentially, China’s central bank, The People’s Bank of China (PBoC) abolished a 2015 rule to reserve a 20% deposit on forward sales of foreign exchange, the purpose of which was to curb capital outflows and stabilize the Chinese currency. The PBoC also ended a requirement for banks to hold reserves against RMB deposits held in Hong Kong and other offshore centers. For real estate markets, particularly in California, it also suggests that there could be further relaxation of capital controls thus resulting in an increase in Chinese foreign investment. In fact, some single-family home community developers in SoCal are already seeing an upwards of 98% occupancy from China buyers.
Investorist recently issued their "China 2017 International Property Outlook Report" (available for downloaded here) surveying over 120 agents, including wealth managers, education advisors and immigration attorneys all advising their Chinese clients on where to buy property in the US, and while education still seems to the be primary draw, there are other factors fueling the money flood into SoCal's housing market.
Investorist's VP of Sales for Americas, Josh Cunningham, provides more insight on what's fueling Chinese interest in specific Southern California markets.
TOP 3 SOCAL HOUSING MARKETS CHINESE ARE INVESTING IN NOW
(featuring quality of education + investment interest level)
Sweet Spot Pricing: $2M and upwards
Investment drivers: Excellent schools (like UC Irvine, Pepperdine, California State-Fullerton). Most Asians buying here are upgrading and often purely for status point of view. A number of corporations, particularly in the technology and semiconductor sectors, have their national or international headquarters in Irvine, also appealing to potential Asian buyers working in those fields. Additionally, in 2016, Irvine also became the largest city in the continental United States with an Asian American plurality, accounting for around 45% of the city's population.
2. PORTOLA HILLS
Sweet Spot Pricing: $1.8-$2.2M
Investment drivers: Just 10 mins out from Irvine, many brokers tend to position Portola Hilla as a better value versus Irvine due to the area's bigger houses, extra bedrooms, and bigger block of land without the Irvine taxes.
Sweet Spot Pricing: $500,000-$700,000
Investment drivers: Surprisingly, Chino is attracting more Asians due to the city's family-friendly amenities, low unemployment rate, home appreciation, excellent schools and affordability over Orange County. Take a walk around College Park in Chino and you'll likely hear more conversations in Mandarin than English.