Money from China finds a home in U.S. real estate in a big way: California primary target with other

Money from China finds a home in U.S. real estate in a big way: California primary target with other states like Texas and New York benefitting. EB-5 Visa program now has multi-year backlog because of China.

“This year, Chinese families represented for the first time the largest group of overseas home buyers in the United States. Big spenders on new homes are helping prop up local economies in the Midwest. But in dense areas like San Francisco and Manhattan, they are also affecting the affordability and availability of housing, as demand outpaces supply and bidding wars ensue.
While Chinese purchases make up a small sliver of overall sales in the United States, they have had a disproportionate impact on the market for more expensive properties, buying one in 14 homes sold for more than $1 million. On average, buyers from China, including the mainland, Taiwan and Hong Kong, pay $831,800 for a home, more than three times as much as Americans spend, according to a National Association of Realtors survey.”

“Some Chinese are buying homes purely as investments, capitalizing on surging rents in many parts of the United States. Others are trying to move their money beyond the reach of the Chinese government.
Many buyers have their children’s education in mind, picking up homes in good school districts or close to universities. At the upper echelon, the wealthy are hoping for green cards, joining with developers to take advantage of a federal program that fast-tracks them for residency.
Eric Du, a management and investment consultant from Beijing, was motivated by the potential for his family and his fortune. Over the last two years, he bought a townhouse — sight unseen — and two single-family homes in Northbrook, Ill., north of Chicago. He paid cash for all of them.
He plans to live in one, to give his children a chance to breathe cleaner air and learn at a better school than he could find in his hometown. He will rent out the other two.”

“(SCMP) More Chinese are expected to apply for the United States’ investor visa this year as people embrace an expanded immigrant quota and promising business opportunities, says a think tank report released yesterday.
Mainland Chinese received 9,128 EB-5 investor immigrant visas last year, 46 per cent more than in 2013. Among the 10,692 investor visas the US issued last year, mainlanders received 85 per cent of them.
The visa, with no age limits or language requirements, grants US citizenship to foreigners willing to invest at least US$500,000 (HK$3.88 million) and create 10 full-time jobs in the US.”

“(LucidText) I-526: FY2015 saw a huge number of I-526 filings – over 14,000 receipts (with 46% filed in the fourth quarter in a surge prior to possible program changes). Assuming that only about 10,000 EB-5 visas can be issued in a year, and an average of 2.2 visas per investor I-526, then this year’s receipts alone will take up over three years-worth of available EB-5 visas. FY2015 ended with over 17,000 petitions pending, which would take up nearly four years of available EB-5 visas. USCIS has shown impressive year-on-year improvements in the number of I-526 petitions processed, up 32% in 2014 and 42% in 2015. USCIS even briefly caught up to the number of receipts in Q3 2015, but then got snowed under again with the blizzard of filings in Q4 2015.”

“Outside the United States, the Chinese demand has been so great that some places are trying to temper it.
Hong Kong and Singapore have each imposed 15 percent taxes on nonresident buyers of residential real estate. In Australia, the state government of Victoria, which includes Melbourne, introduced a 3 percent tax on overseas buyers.”