One of the most prominent trends in New York City real estate firms is the hiring of Chinese nationals. This trend is a result of the rising Chinese interest in purchasing NYC real estate over the past decade.
The growth of Chinese economy combined with their interest in urban real estate in the U.S. has created new opportunities for growth among NYC real estate firms.
The growth of Chinese interest in NYC real estate
Although the Chinese economy has been growing by leaps and bounds for quite some time, it has only been since the turn of the century that they have started to make their presence known in the real estate market in cities across the country.
That growing trend is due to many factors that began to multiply after the collapse of the U.S. housing market in 2008.
During that time — with the lower overall property prices thanks to decreased sales — Chinese investors began eyeing urban development that promised a healthy return when the economy rebounded as a primary opportunity.
However, the real change in investment began only a few years ago as the Chinese economy started to surge and the U.S. economy faltered. This shift created more millionaires and powerful entrepreneurs who then started to flex their investing muscles by looking into real estate opportunities around the world.
New York City was still in recovery mode when these investors began to sink some serious money into many commercial developments. This trend has expanded to residential investments.
Furthermore, these same investors are somewhat weary of their government in terms of the safety of their finances. So, investing heavily in overseas real estate is a way for them to protect their wealth.
This combination has led to the rise of purchasing both new and prized real estate developments and a greater effort toward expanding their investment potential from commercial to residential areas.
Chinese influence in NYC
Some of the largest real estate firms in NYC are already taking advantage of the influx of Chinese investors. For example, Park Avenue International Partners, which had only three brokers who spoke Chinese in 2013, today employs 12 agents to handle the extraordinary increase in investment from Chinese entrepreneurs and businesses.
Since 2001, the Park Avenue firm has brokered over $1 billion in terms of real estate sales in Manhattan to customers who live in Southeast Asia and Hong Kong. That area of China has arguably been the center of this new trend.
However, there is a noticeable shift in buyers who now come from China proper — places such as Shanghai, for example, where residents are reaching millionaire status rapidly.
There have been many other real estate firms in NYC that have also hired Chinese nationals to keep pace with the growing interest from investors in NYC properties.
Companies including The Corcoran Group, Brown Harris Stevens and Douglas Elliman have recognized the growth and reacted by bringing in those who can effectively translate Chinese to ensure that they can interact in this current market.
There are even some American brokers who now have begun to specialize in buyers from China, as their business is becoming so significant. However, it must be noted that many of the Chinese investors who have made real estate purchases speak English quite well.
Why have Chinese investors chosen NYC real estate?
There are many reasons why, but arguably the most important is the safety factor that these investors see in NYC real estate development.
New York City is seen as a continual urban development that is constantly growing and changing, which means that real estate investment in the short and long terms is safe.
Also, many of these investors do not need to borrow money because they already have the cash necessary to make the transaction.
By avoiding lending institutions, they not only have greater bargaining power but also they can make the purchase far more quickly, which means that they are attractive buyers.
Chinese regulations have caused a unique quirk in the financial rules that investors face — they can convert only $50,000 of their currency. However, as with many financial rules, these investors have managed to find ways around them.
Until a few years ago, Russians were the biggest foreign buyers of NYC real estate, but because the Russian economy has struggled in recent years, the Chinese have now taken over that rank.
Currently, the economy in China has also slowed down considerably, though it hasn’t prevented the Chinese from investing overseas.
Given current trends even with a weakened Chinese economy, it seems that Chinese investors will be the most powerful of all foreign buyers in the NYC real estate market.
The combination of safety, growth potential and the many advantages of owning property in the region have made for a powerful combination that will keep Chinese investors coming to New York City for the foreseeable future.
Omri Barzilay is the CEO at Propcy. You can follow him on his blog or Twitter.
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