Despite threats of tariffs and taxes from both countries’ leaders, Chinese investors are still bullish on U.S. real estate investments.
Although the rhetoric has been heated on both sides as President Trump and President Xi trade threats about various tariffs and taxes to potentially be imposed on each other’s respective countries, Chinese real estate investors do not seem to be too worried about a potential trade war and its effects on their U.S. investments. In fact, said Carrie Law, CEO of Juwai.com, “Most Chinese investors are cautiously optimistic [at this point].” Juwai.com is a website specializing in international real estate investments for Chinese investors. Law added, “From all sides, you hear that this trade war is not likely to escalate to the point where it is a serious threat to international trade and relations.” She compared the conflict to “a noisy argument between two friends who later hug and make up.”
Investor Insight: If your real estate strategies (or target markets) rely on foreign investments, track international sentiment about a potential trade war closely.
Although Chinese real estate investors are not particularly worried, U.S. stock market investors certainly are. Last week, stocks fell significantly, rallying only in the wake of a tweet from President Trump stating, in part, “President Xi and I will always be friends, no matter what happens with our dispute on trade,” and a response from President Xi, indicating he will “open his country’s market wider to foreign competition.” He publicly stated that China will reduce auto tariffs, permit more competition in banking, and “better protect intellectual property.”
In 2017, Chinese buyers purchased about $31.7 billion in U.S. real estate. In March of this year, Chinese demand for U.S. real estate rose 26.2 percent over the previous month. Law warned this could be partially symptomatic of a desire to invest in the U.S. before a trade war begins, but reiterated that she did not expect this to occur.