A report released by property consultancy Jones Lang LaSalle in November 2013 stated that China's overseas real estate transaction volume exceeded $5 billion in the first three quarters of 2013. Based on a 25% year-on-year increase, this transaction volume surpassed the historical record of $4 billion for the entire year of 2012.
The "Annual Report on Chinese International Migration (2014)" (hereinafter referred to as the "Migration Report"), released in January 2014 by the Center for China & Globalization (CCG) and the Social Sciences Academic Press, suggests that in the United States alone, the amount spent by Chinese citizens on property purchases has long exceeded $10 billion. In the year leading up to the end of March 2013, the total value of property purchased by Chinese citizens in the U.S. reached $12.3 billion, accounting for 1/8 of the total value of foreign property purchases in the U.S. that year, second only to Canada, with an annual growth rate as high as 66%. Of the $12.3 billion in property purchases, 69% was paid in full with cash.
Compared to domestic "speculative buying groups," the primary purpose of most overseas property purchases is not speculation. The demand for purchasing property for children's education accounts for a large proportion, a phenomenon that has emerged in major study-abroad countries and key cities due to the significant increase in the number of Chinese families sending their children abroad for education.
In addition, with the rapid development of China's economy, and particularly following the successive global economic crises and their impact on the economies of developed nations, some countries have introduced "overseas property purchase" services to revitalize their real estate sectors and attract overseas investors to expand their businesses, based on their own regional economic development and increased consumption.
More importantly, liberalizing investment immigration policies is a new trend in European countries. Many European nations have opened their doors, implementing open policies for Chinese investment immigrants. Latvia, Hungary, Portugal, Spain, Greece, Cyprus, and other countries have successively introduced legal measures for property-based investment immigration.
At the 2013 spring and autumn property exhibitions in Beijing, overseas projects accounted for more than half of the exhibits. At the spring exhibition, the number of foreign housing project exhibitors exceeded 180; by the autumn, the number of participating foreign projects surged to 260, more than ten times the number in 2009.
Behind the massive overseas property buying groups lies a huge potential group of overseas investment immigrants. According to a survey by SouFun International, among 12 million potential buyers surveyed, 43% stated that immigration was the primary purpose for overseas property investment; followed by education at 25%; and investment at 23%. China has become the second-largest source of overseas real estate investment in the United States.
The "residency-by-investment" programs represented by Europe are favored by Chinese investors for their simplicity and efficiency, but investors should also be aware of the risks. First, Chinese citizens are often unfamiliar with foreign laws when purchasing property abroad and tend to assume that Chinese laws and regulations apply, which creates significant risks for investors. Second, for those who wish to immigrate through property purchase, foreign governments may adjust their immigration policies based on domestic economic conditions, and such adjustments will have a direct impact on these investors. Furthermore, the global financial crisis and the European debt crisis have significantly reduced the credibility of banks, which can affect the security of funds for overseas property buyers. Therefore, it is best for investors to apply for property-based immigration programs in European countries through reputable and honest immigration agencies that have strong cooperative relationships with top-tier foreign developers.