While other countries are entering a state of economic decline, China is becoming a global economic tiger. Chinese investors are currently on a property-buying spree, fuelled by China’s surging wealth from the country’s slowly expanding influence in the gold, oil and food markets. In addition, China has taken the consumer market by storm, surpassing the US, turning them into the world’s no.1 investor.
Why Chinese Investors are Eyeing on Foreign Real Estate?
The primary reason for purchasing real estate abroad is that it is a lucrative investment. In addition, buying overseas real estate is an ideal asset protection. Some Chinese do not have intentions on moving to a foreign country but they remain eyed on possible opportunities for earning above average profit. They often go for buying a run-down or distressed property; then they make renovations before selling the property. A good profit margin would be along ten percent to twelve percent. This can then be sold after several months. Recently, Beijing, China has established a state-backed wealth fund from its $3.2 trillion foreign reserves, which paved way to giving assistance for Chinese companies to invest overseas, according to China Invests Overseas, one of the leading online resources for investment news.
Why Should Chinese Investors Buy German Property?
Properties in Germany are getting attention from Chinese investors for the following reasons:
Due to the ownership restrictions in China, investors are now looking at various real estate markets to purchase, preferably in places that have stable and high-end properties. The Real Estate Expo “Spring of Shanghai” noted that Chinese buyers are very interested in investing and targeting progressive English-speaking countries for their children to study in. But while this is true, Chinese investors find Germany, known as a German-speaking country, to be an interesting alternative because of its schools that are known for providing world-class education.
- Gathering Monetary Resources
Pooling in money for an investment is not an obstacle. Most Chinese go to relatives for assistance, gathering their annual quotas in order to have a sufficient down payment. Wealthy buyers, on the other hand, can simply locate their trade offices or companies in countries that do not have currency restrictions. This enables them to pay via their companies’ offshore accounts.
- Free up Foreign Exchange Reserves
China needs to slow the fast build-up of its foreign exchange reserves. Currently at $2.85 trillion, it is considered as the world’s largest. Freeing up China’s investment overseas can do just that.
- Growth of German Real Estate Market
Finally, the very reason why Chinese investors prefer to invest in Germany is its potential to offer investors high returns in commercial and buy-to-let property investments. Popular locations include Berlin and Munich. It is important to note that Germany is pro long-term investment. Western Germany is experiencing significant rise in home values. Moreover, there is improvement in the economy as unemployment rate declines, and there is a high proportion with regards to fixed rate loans, giving stability to the residential property market.
Overall, Germany offers more than a wide array of cultural experience. Investments in German properties are an ideal way to boost monetary resources.
