House-hunting tours target bargain deals in US
Updated: 2013-02-01 13:24
By Liu Yuhan in New York (China Daily)
A woman consults about buying a property in the US at a real estate show in Beijing. Zhu Xingxin / China Daily
An online Chinese real estate firm has organized a house-hunting tour aimed at wealthy Chinese shopping for a home in the United States.
The tour, offered throughout 2013 via SouFun.com, the website of Beijing's SouFun Holdings Ltd, will hit Boston, New York, Las Vegas and Atlanta as well as communities in California and Florida.
It isn't the popular website's first house-hunting tour, but it is its largest, organizers said.
"We organized a similar tour back in 2009, when China's real estate market was developing at a very fast speed," said Rachel Wen, overseas marketing director at SouFun International, a subsidiary of Beijing's SouFun Holdings. At that time, however, not too many customers were fully aware of overseas home investment, Wen said. "But now it seems to be good timing as the real estate market gradually recovers."
SouFun Holdings, established in 1999, is China's biggest provider of online real-estate information, advertising and listing services. It serves China's growing real estate market, as well as the burgeoning home-furnishings and home-improvement sectors.
The National Association of Realtors, a US trade group, last week reported that US home sales rose 9 percent to 4.65 million units in 2012, the highest annual total in five years. The association reported that international sales for the 12 months ended in March 2012 totaled $82.5 billion, with China-based clients accounting for 11 percent, up from 9 percent a year earlier. Chinese buyers trailed only Canadians as the second-biggest foreign purchasers of US homes, the association said. Although low prices and the weak US dollar generally are seen as the major reasons behind the increase in international real-estate transactions, experts also cite China's internal restrictions on real estate purchasing as spurring robust overseas home-buying by rich Chinese.
China's Ministry of Housing and Urban-Rural Development said in December that the country will extend its purchase restrictions on housing and maintain its tight credit and tax policy to prevent multiple home purchases in 2013. Multiple buying usually is done by real-estate speculators.
"It doesn't seem that restrictions on multi-home purchasing will be loosened in China at this point," Wen said, crediting the constraints with prompting many wealthy Chinese to shift their attention to the US market.
About 20 people have signed up for SouFun.com's US tour since registration began, Wen said. The tour will continue through 2013, to accommodate the company's increasing list of Chinese clients eyeing a US home purchase, mainly as an investment or to provide living quarters for children who could attend a US school.
Wen said she expects registration to jump after the Lunar New Year holidays.
"Because we won't charge people for attending the tour, the only things they need to pay for are the plane tickets, accommodations and dining. It'll be quite tempting."
The tour takes participants to destinations where buyers have been most active, as highlighted by last week's realtors association report.
In the report, four states accounted for 51 percent of the purchases: Florida, California, Texas and Arizona. Florida was the fastest-growing destination among international buyers, including Chinese clients, accounting for 26 percent of foreign purchases. The second-most popular destination was California, with 11 percent, and Texas and Arizona with seven.
Jed Smith, managing director for quantitative research for the National Association of Realtors, said the house-hunting reflects an awareness that the US housing market offers Chinese buyers "very good value".
"Prices are much higher in China. Although the US real estate market has been depressed for a number of years", he said. "Now US home prices are relatively low."
The NAR's recent Pending Home Sales Index, a forward-looking indicator based on contract signings, was 101.7 in December, up 6.9 percent from the 95.1 of a year earlier. Amid tight inventory, pent-up demand and favorable affordability, conditions bode well for the market.
Lawrence Yun, the NAR's chief economist, has said he expects US existing-home sales to rise another 9 percent this year, on top of a 9 percent increase in 2012. Experts believe that although US prices are rising, the market will keep attracting foreign purchasers, including from China.
Yun said he sees China's US home-buying spree continuing "modestly" for the next few years.
A stronger US real estate market is seen as boosting investors' confidence. The NAR reported that total sales in 2012 were the highest in five years, while the annual price rose the most since 2005.
Total existing-home sales, including single-family homes, townhouses, condominiums and co-ops, was at an annual rate of 4.94 million in December, up 12.8 percent from a year earlier, according to US government data.
Experts say the US real estate market is beginning to rebound, helped by attractive prices that will continue to attract buyers, including Chinese clients.
And those factors suggest why house-hunting tours will continue to gain popularity among Chinese buyers.