| NEW YORK/SYDNEY, April 25
NEW YORK/SYDNEY, April 25For the first time, the
Chinese have become the biggest foreign buyers of apartments in
Manhattan, real estate brokers estimate, taking the mantle from
the Russians - whose activity has dropped off since the unrest
in Ukraine and the imposition of sanctions against Russia by the
Wealthy Chinese are pouring money into real estate in New
York and some other major cities around the world, including
London and Sydney, as they seek safe havens for their cash and
also establish a base for their children to get an education in
Reuters asked five of the top real estate brokerages for
their ranking of foreign buyers in New York City. The Chinese
ranked first in both volume and value of sales in all their
estimates. Opinions differed on just how the Russians, Europeans
and South Americans stacked up next.
There are no official figures collected on the national and
ethnic backgrounds of home buyers because of U.S. fair housing
laws, designed to protect against discrimination.
The Chinese interest is mainly a valuation play, real estate
experts say. After the U.S. housing bust in 2007-2010, home
prices in major U.S. cities fell to levels that made them
attractive. While U.S. prices have been recovering, they are
still appealingly low by comparison with many other parts of the
Many Chinese buyers are switching their interest away from
markets like Shanghai, Hong Kong and Singapore amid fears that
prices have soared to frothy levels in those cities. Hong Kong
has the second most expensive housing market in the world,
behind Monaco, with Manhattan trailing in sixth place, according
to British real estate research firm Knight Frank.
The brokers say that many Chinese buyers are also investing
abroad so they can own property near major educational
institutions. Some are buying homes near top colleges - even
though their children are so little they can't walk yet. More
than 80 percent of wealthy Chinese want to send their children
overseas to school, according to the Hurun Report, a
"By far and away, the Chinese are the fastest growing
demographic," said Dean Jones, a U.S.-based broker with
Sotheby's International. "They are the top consumer for real
estate, and New York is front and center."
Added Pamela Liebman, CEO of the Corcoran Group, one of the
best known New York real estate firms: "In sheer numbers, the
Chinese outspend the Russians in every segment of the market."
THE RUSSIANS: "THEY'RE GONE"
In Manhattan, it wasn't long ago that Russian oligarchs
dominated the gilded world of real estate, gobbling up
status-heavy, marquee properties, such as an $88 million, Robert
A.M. Stern-designed penthouse and a $75 million mansion with a
ballroom and a rooftop aerie.
Now, many brokers say, Russian buyers have become scarce
largely because of fears that the struggle over Ukraine will
worsen leading to increasingly tough U.S. sanctions on
politically-connected and wealthy Russians.
"They're gone, they're gone," said Sotheby's International
broker Nikki Field, "They've been gone since the Crimean
The Chinese grew to 28.5 percent of Field's international
business in the first quarter of 2014, up from 19 percent last
year. "We've only scratched the surface with Chinese demand,"
Chinese buyers typically used to pick up properties in the
$1 to $5 million range in New York, often buying two and three
at a time for investment purposes, the brokers said.
But lately they have been moving up market, brokers say. The
current in-vogue building among the Chinese is Central Park's
One57, a new skyscraper designed by Pritzker Prize-winning
French architect Christian de Portzamparc, where they can spend
$18.85 million for a three-bedroom or $55 million for an
apartment taking up the entire 81st floor. The building comes
with all of the amenities of a five-star hotel.
The Chinese are also venturing out to Long Island, where
they are buying Gatsby-esque mansions set atop rolling greens.
Broker Shawn Elliott ferries around groups of Chinese buyers
in Rolls Royce and Mercedes-Benz luxury sprinters every week,
often catering to entire families at a time.
"They're looking for trophy properties," said Elliott.
"They're looking for their children to be comfortable, and to be
near Columbia or New York University."
Some Chinese aren't even bothering to come to the United
States at all, going so far as to pick up multi-million-dollar
properties sight unseen.
One Chinese buyer recently purchased two properties, worth
$13 million, at the Baccarat Hotels & Residences in New York.
The entire deal was done via the Chinese social networking site
WeChat, according to the broker who did the deal, Douglas
Elliman's Emma Hao.
"I think the Chinese trend is onwards and upwards," said
Liam Bailey, a partner with Knight Frank. "There will be more
Chinese buyers, and they will take more share of the market."
New York isn't alone.
In Sydney, the Chinese became the top buyers of new luxury
homes last year, according to sales research conducted by Knight
Shanghai businessman Wang Jiguang has already picked up two
houses in another major Australian city, Melbourne, and one
apartment in Sydney. "My child is going to study abroad, and we
are just preparing some overseas assets for our child, which
will be less risky," Wang said in a telephone interview from
Mainland Chinese were the top foreign investors in
Australian real estate last year, according to Australia's
Foreign Investment Review Board. They bought $5.9 billion worth
of property, accounting for 11.4 percent of total foreign
investment in real estate, FIRB said.
The data includes both residential and commercial
properties. But the average value of the purchases for China is
the lowest of all the countries, which suggests a large number
of the deals are for residential property.
Monika Tu, a broker at top-end real estate firm Black
Diamondz Property Concierge in Sydney, says that over the past
year mainland Chinese have become 80 percent of her
"There is nearly no local market for top-end properties,"
That fact has made the local headlines, with some accusing
the Chinese of "pricing out local buyers". In March, Australia's
federal parliament announced an inquiry into foreign investment
in the sector in a bid to find out whether local real estate
deals are being properly policed.
In Manhattan, some locals are also starting to grumble,
brokers say, about the new "China Price", a phenomenon that can
see Chinese buyers sweep in and outbid other buyers, often with
In London, robust property laws and British universities are
a big draw for the Chinese. They became the city's number one
foreign buyer last year, according to Knight Frank, accounting
for 6 percent of all purchases over 1 million pounds ($1.68
million). The Russians accounted for 5.2 percent.
"The Russian buyers are a maturing market," said Bailey.
"And they aren't growing anything like the Chinese buyers."
(Reporting by Michelle Conlin and Maggie Lu Yueyang; Editing by
Martin Howell and Alex Richardson)