Coronavirus disruption is slowing down the global luxury market

Tours and closings hampered by travel restrictions

Mar.March 03, 2020 08:37 AM
Many wealthy Chinese have chosen to stay overseas during the outbreak. (Photo by TIZIANA FABI/AFP via Getty Images; Unsplash)

Many wealthy Chinese have chosen to stay overseas during the outbreak. (Photo by TIZIANA FABI/AFP via Getty Images; Unsplash)

Apartment tours via WhatsApp. Surgical masks at open houses. As the coronavirus outbreak disrupts international travel and threatens to infect millions worldwide, sellers of luxury real estate worldwide are seeing their business impacted in many ways.

Chinese buyers were still the single largest group of foreign homebuyers in the U.S. last year despite a steep drop-off, spending $13.4 billion on U.S. property, Bloomberg reported.

“I tell them that I have some nice properties that I saved for them,” Keller Williams broker associate Coco Tan told the publication, noting that most Chinese buyers — who represent about 25 percent of her clientele — have postponed visits to California until after the summer.

Last week, luxury home builder Toll Brothers said that 11 closings in California had been delayed because of COVID-19.

Meanwhile, as many wealthy Chinese have chosen to stay overseas during the outbreak, Sydney’s luxury market has seen a brief surge in demand — though embassy closures have slowed down processing of “significant investor” visas, or Australia’s version of EB-5.

And many neighborhoods in Los Angeles’ Orange County, where Chinese buyers often only reside part-time, appear more populated these days as more people choose to stay put.

Disruption to construction supply chains could also become a problem for residential developers. Silverback Development is currently seeking alternatives to granite countertops from China for its 13-story condo project near Gramercy Park in Manhattan.

“We’re nervous,” Silverback principal Josh Schuster said. “What if the supply chain could cause delay to the delivery of our kitchens or stone materials? Without a real solution, I can’t take that risk.” [Bloomberg] — Kevin Sun

Related Articles

The executive chef of Otto Enoteca stands in front of the closed restaurant caused by the coronavirus pandemic. (Photo by ANGELA WEISS/AFP via Getty Images)

How hospitality job losses will spill over into real estate, construction

Governor Andrew Cuomo (Credit: Cuomo by  (Photos by John Lamparski/NurPhoto; Newsday RM via Getty Images)

State allows more construction, but raises questions on housing

Missed loan payments will approach Great Recession highs, a new report finds (Credit: iStock, Getty Images)

Missed loan payments to approach Great Recession levels: Fitch

Federal Reserve Chairman Jerome Powell (Photo by Sarah Silbiger/Getty Images)

Fed ramps up lending with new $2.3T program

eXp Realty CEO Jason Gesing

Virtual brokerage eXp slashes 15% of staff

From left: Donald Trump, Jane Goldman of Solil Management, Jorge Perez of Related Group, Stephen Ross of Related Companies, Jeff Greene, Brian Chesky of Airbnb, Sam Zell of Equity Group Investments, Jeff Sutton of Wharton Properties with Adam Neumann, former WeWork CEO (Illustration by The Real Deal)

These US real estate titans made Forbes’ billionaires list

When the coronavirus crisis subside, offices could do away with hot-desking (Credit: iStock)

How the coronavirus could change the office of the future

Equinox Executive Chairman & Managing Partner Harvey Spevak, Related Companies CEO Jeff Blau and Equinox at Hudson Yards (Credit: Spevak by Jamie McCarthy/Getty Images for Gabrielle's Angel Foundation, Blau by Craig Barritt/Getty Images for Related-Oxford, Matthew Peyton/Getty Images for Equinox)

Equinox isn’t paying rent at multiple NYC locations