Social media sites and online realtors are playing a critical role in facilitating the overseas property investments of Chinese’s burgeoning middle class.
Foreign property investment by Chinese nationals has surged in just the past two years, with data from real estate consultancy Savills indicating that they accounted for US$13.5 billion in overseas purchases last year. That marked an increase of over 100 per cent compared to the figure of US$6.3 billion logged the previous year.
US real estate data firm Zillow Inc said clients from mainland China were the second largest contingent of foreign buyers of US homes last year, spending US$425,000 on average as of the end of March 2013.
The Internet is playing a critical role in the current wave of offshore property investment emanating from the Middle Kingdom. Clients are using China's social media platforms such as QQ and Weibo to communicate with overseas realtors, while property websites are reaping massive benefits from the facilitation of deals.
Juwai.com, the leading real estate portal catering to Chinese investors hoping to acquire property offshore, was founded less than three years ago, but is already doing a roaring trade on the back of its burgeoning target demographic. The company referred US$1.1 billion in potential transactions to international realtors during the second half of 2013 alone.
Andrew Taylor, the Hong Kong-based co-chief executive officer of Juwai, said many of the clients referred by the company have cavernous pockets, equipped with budgets of nearly US$300 million.
According to Taylor, the nature of the inquiries made by potential clients has already changed in the few years since its founding. Whereas in the past, prospective buyers were mainly preoccupied with finding residences of their own in the United States, their focus has since shifted to making profitable investments, and are more concerned about capitals gains, yield potential and local tax regimes.
Rival realtors and online vendors are rearing to grab a piece of the huge market so deftly exploited by Juwai via the Internet. Sina Corp, a Nasdaq-listed firm which is one of China's most popular web portals, has established Soufan.com for Chinese Internet users hoping to buy property abroad. Zillow has announced plans to enter a partnership with Beijing-based Yisheng Leju Information Services in order to gain direct access to the Chinese market.