800,000* Chinese HNW to buy properties in next 3 years globally.
The annual survey “Immigration and the Chinese High-Net-Worth Individuals 2016″ by Hurun Report and Visas Consulting has found the following:
60% of HNW respondents intend to invest in overseas property over the next 3 years. With 1.34m Chinese HNW, that equates to 800,000 buyers,according to Rupert Hoogewerf, Hurun’s founder.
Value for money is the primary consideration when buying a house overseas, followed by high rates of return and the immigration status it confers.
Main reasons for buying? 43% for living in or renting out, followed by asset allocation and children’s education.
Where to buy? Close proximity to a good school led by 52%, being in ‘downtown’ (23%) and close to Chinese communities (17%).
56% said the Chinese currency weakness was a source of concern. (The yuan has fallen from a high of just over 6 Yuan to the US$ in early 2014 to around 6.77 currently, the weakest since Q3 2010)
Concerns about a possible property bubble bust in China’s first-tier cities have made China’s HNW consider overseas investment more seriously. And the sharp rise in Chinese property prices makes overseas investments represent more value for money.
Demand for related services is also on the rise, with investment advice (53%) the most sought-after service, followed by the provision of information about overseas property markets (43%) and overseas property brokerage (32%).
Overseas financial investment accounted for 15% of the wealth of the individuals surveyed. The main reasons for investing overseas are to spread their investment risk, children’s education and with emigration in the back of their minds.
When investing overseas, asset safety is the top priority. 64% chose ‘risk control’ as their foremost consideration. Foreign exchange deposits are the investment of choice, at 31%, followed by funds with 15% and insurance accounting for more than 10%. ‘For Chinese HNWIs today, their investments overseas are conservative nest eggs, not risk capital,’ said Rupert Hoogewerf, Hurun’s founder.
The survey was based on interviews with ~ 300 HNW people with average net assets of CNY27m (A$5.2m) who have emigrated or are considering it.
HNW is defined as those having net wealth of CNY10m (approx. US$1.5m).
Preferred Countries for Chinese HNW emigration**
Source: Immigration & the Chinese HNWI 2016, by Visas Consulting Group and Hurun Report.