Rich Chinese lose interest in US real estate, eye Singapore, Malaysia for alternatives

In a survey released last month by real estate tech firm Juwai IQI, the U.S. dropped from its top position to seventh place in 2024 among preferred destinations for wealthy Chinese buyers looking for properties valued at US$5 million or more. Thailand claimed the top spot, followed by Australia, Canada, Malaysia, and the U.K.

The survey revealed that 94% of buyers last year were looking for homes that they or their families would use, such as vacation homes or student housing for their children.

Some 6.5% were buying for investment purposes, while only 3% cited emigration as their reason – a decline from 7.3% in 2023 and 11% in 2019.

Kashif Ansari, the property portal’s group CEO, noted that Chinese investment in US homes has more than halved from its peak in 2017 as some buyers have been discouraged by geopolitical friction, protectionism and increased scrutiny of property deals.

"Buyers are looking for friendlier alternatives," he said.

The trend reflects a decline in the U.S.’ appeal as a destination for overseas tourists and international students, according to the South China Morning Post.

Data from its National Association of Realtors indicated that Chinese spent $7.5 billion on U.S. homes in the year to March 2024, a sharp drop from $13 billion a year earlier.

As super-luxury Chinese buyers turn away from the U.S., Malaysia and Singapore have emerged as alternatives closer to home.

In the first quarter of this year, Chinese investors purchased 301 residential units in Singapore, a 42% increase compared to the 212 homes bought by this group a year ago, official data showed.

A study published last month by property consultancy Savills highlighted the city-state as the top relocation destination for companies and the third most popular for high-net-worth individuals.

George Tan, managing director at Livethere Residential at Savills Singapore, explained that Singapore’s appeal lies in its political stability, tax advantages, strong legal system, and top-tier education and healthcare.

"With luxury residential options and a thriving business ecosystem, it has become a top global destination for those seeking wealth preservation, global connectivity and a premium lifestyle," he added.

In neighboring Malaysia, revisions to the Malaysia My Second Home (MM2H) program, the country’s residence-by-investment scheme, have made it easier for affluent foreigners to settle down and buy property using fixed deposits, according to Juwai.

"Malaysia has grown in appeal as a destination offering a luxury lifestyle at better value," the firm said, as cited by The Business Times.

"Compared to Bangkok or Singapore, prime homes in Kuala Lumpur or coastal locations cost 87% less, while offering comparable spaces, amenities and prestige."

Beyond Southeast Asia, Chinese interest in property has also picked up in traditional destinations such as Australia and the U.K., according to property agents.

David Johnson, managing director at property consultancy Inhous, which has offices in London, said his firm has recently helped several Chinese clients who deem the U.S. property market "too volatile amid political developments."

"The U.K. – particularly London – continues to appeal because of its excellent universities, a highly respected cultural scene and career opportunities, as well as quick transport links to Europe," he noted.

In Australia, Peter Li, general manager of real estate firm Plus Agency, said a Chinese executive and his associate, who frequently travel between Shanghai and Singapore for business, began searching for a Sydney property worth around A$10 million (US$6.4 million) last month after shelving plans to invest in U.S. real estate.

He added that Australia offers not only a more stable environment but also a more convenient time zone for Asia-based buyers, unlike the U.S., which he described as being on the opposite schedule.