The number of high-net-worth individuals in China has grown rapidly, making it the second-largest country and region in the world after the United States in terms of the number of high-net-worth families. For high-net-worth individuals, how to rationally allocate assets and discover new value growth points will be the mainline for future wealth preservation and appreciation.
Investing in overseas real estate has become a choice for an increasing number of high-net-worth individuals. Data shows that the average age of high-net-worth individuals with assets of over ten million yuan in China is 38 years, with average annual consumption accounting for 3.4% of their average wealth, and real estate is their main investment direction.
High-net-worth individuals are accelerating their pace of overseas property investment.
In the past three years, there has been a significant increase in the number of high-net-worth individuals investing in overseas real estate. On one hand, this is due to the continuous decline in domestic asset returns and increasingly tightening real estate market policies, while on the other hand, it is also influenced by the continued depreciation of the renminbi and relatively low levels of overseas loan interest rates.
The main motivations for high-net-worth individuals investing in overseas property are “investment” and “education”, followed by considerations for “immigration” and “self-occupation” needs. It is estimated that in the next ten years, about 30% of high-net-worth individuals in China will have a demand for overseas asset allocation, with an expected compound annual growth rate of 20.6% for investment demand, and the investment amount is expected to reach 3.27 trillion yuan.
Advantages of Overseas Real Estate Investment
The advantages of choosing to invest in overseas real estate are self-evident. From the perspective of investment returns, investing in overseas real estate can provide investment returns through the appreciation of the property's inherent value. Looking globally at the real estate market, investing in the primary stage of the market is a good choice. Another way is to generate annual cash flow income through rental of the property. Overseas rental yields are often very high.
Benefits such as overseas education, air quality, and food safety also drive Chinese residents to move abroad, seeking overseas property to meet these needs. Additionally, there are advantages such as establishing reserves in different currencies and low investment thresholds, among others.
Selection of Overseas Real Estate Investment Markets
Currently, the overseas real estate market is mainly divided into two parts. On one hand, there are relatively mature markets, such as the North American real estate market. On the other hand, there are emerging markets, such as the real estate market in European countries, which has become very popular in recent years.