The Chinese connection: Miami real estate agents court Chinese buyers
In November 2013, a group of Miami real estate brokers at an industry conference in San Francisco encountered a large group of top brokers from China.
For an hour, Miami Realtor association CEO Teresa Kinney and other local leaders pitched the Chinese brokers on Miami, hoping to tap a growing and potentially huge source of customers.
Last December, Kinney joined a trade mission to Hong Kong sponsored by the Greater Miami Chamber of Commerce and continued her pitch. The local delegation, which also traveled to Shenzhen and Guangzhou, China, included nearly 20 attorneys, bankers, marketers and Realtors.
Kinney says that although Chinese home buyers in the U.S. historically have focused on the West Coast, they’re increasingly discovering Florida “and Miami in particular.”
Education is a big driver, she says. “The fact that we have all these colleges and universities in the immediate area is very important. They’ll buy property for a child who’s attending school, and then property for themselves.”
China accounted for 16% of foreign home buyers in the U.S. during the 12 months ended last March, up from 12% in 2013, according to the National Association of Realtors. California drew the most interest, capturing one in three Chinese deals nationwide. Only 8% of Florida’s international clientele last year came from the region.
“On a map, California is much closer to China than Florida, and it, too, has a good climate,” says Jed Smith, managing director of quantitative research at the National Association of Realtors in Washington, D. C. “There’s a long association of Asians with California.”
When choosing where to buy, Chinese generally take into account jobs, education opportunities and proximity to family and friends, as well as weather and location relative to China, the association says.
Miami’s lack of a long-established Asian community has been a hindrance to attracting Chinese buyers, says Coldwell Banker Realtor Maji Pace Ramos, who went on the December trip to China. “We have a couple of Asian markets, but not a community, per se,” she says.
Nevertheless, Ramos believes the sheer size of China’s outward real estate investment market presents a large opportunity for Miami.
“China has the fastest-growing middle class, and they need to park their money somewhere,” she says. “Miami is a bargain right now compared to Hong Kong, London, Paris and New York. California also is very expensive.”
The federal government last year designated Miami as a regional center under the EB-5 visa program, which could attract more Chinese investment.
The program grants U.S. residency to foreigners who invest at least $500,000 in an American project that creates at least 10 jobs.
The new designation enables Miami to sponsor projects in south Florida, which then enables developers to meet some of their capital needs by appealing to investors seeking U.S. residency, says attorney Mikki Canton, who manages the city’s EB-5 center.
Because the program also extends residency to an investor’s spouse and dependents under 21, it can be especially attractive to Chinese parents who have children attending college in the U.S. on student visas. “A lot of them look at the EB-5 regional center as a way to provide permanent residency to their children,” Canton says.
Another draw may be Miami’s proximity to Latin America. Chinese have been investing heavily in the region for two decades, and Canton says they’re now starting to view Miami as a hub for logistics and professional services.
“They see it as a very vibrant business center where investment can be lucrative. And the beauty is that it’s close to Latin America,” she says.
In one sign of Chinese interest, an affiliate of Beijing-based China Communications Construction recently paid $75 million for a 2.4-acre site in downtown Miami. Shanjie Li, chief executive of New York-based American Da Tang Group, the company’s U. S. partner, says the goal is to build an “iconic skyscraper.”
Chinese Home Buyers
Over a 12-month period ending March 2014, buyers from China purchased $22 billion worth of U.S. properties, about a quarter of the dollars spent by foreigners nationwide.
> $523,148 — Median home price
> 76% — Percentage of buyers who paid cash
> 56% — Percentage who intended to use the properties for vacation or residential rental purposes
> 51% — More than half of all Chinese buyers bought homes in three states: California, Washington and New York.
35% — California
9% — Washington
7% — New York
6% — Pennsylvania
6% — Texas
36% — Other states
Note: Includes buyers from Mainland China, Hong Kong and Taiwan
Source: National Association of Realtors