Chinese investors have made big waves in the New York property market for a while now, but now their influence in the U.S. is being felt beyond gateway cities.
Long Lake, a new development 108-acre development 35 miles northwest of Dallas, in the town of Corinth, is emblematic of the new trend. Beijing-based Zhang Long’s Lelege USA is building 99 mini-mansions at the former Canyon Lake Ranch targeted to Chinese buyers.
The average asking price of homes at the project is $2 million, the New York Times reported. They will include extra bedrooms for buyers’ aged relatives, as well as concierges to help residents set up Internet service and pay bills.
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“When Chairman Zhang saw the strength of the Texan economy, he decided it was time that the Asian community should be presented an opportunity to invest in the American Dream,” read the marketing materials for the development, according to the Times.
Chinese buyers now represent the largest contingent of foreign property buyers in the U.S.. All together, they spent $28.6 billion in the country in the year ending in March, according to the National Association of Realtors.
While the purchases make up a small percentage of all property buys, they’ve been concentrated at the high end of the market. Chinese buyers account for one in 14 of U.S. homes sold for more than $1 million, and pay an average of $832,000 per home, about three times the average amount spent by American buyers.
Buyers from China have also invested heavily in the international commercial property market, with total outbound investments rising 49 percent last year, according to JLL.
Investment has been driven by a number of factors, including a desire to house children studying at American universities, rapid growth in U.S. real estate prices, changing domestic rules on international investment, as well as a need to “fly to safety” by buying U.S. assets in the face of economic instability in China.
“The Chinese are deliberate; there will clearly be large capital flows coming to the West,” Stephen Schwarzman, chief executive of the Blackstone Group, America’s largest private landlord, told the Times. “That will increase in frequency until the Chinese government decides it shouldn’t happen anymore — they’ve opened the spigot.”