Are you planning to sell your overseas property fast? Normally, most people who are looking to sell their property abroad are of the opinion that their best chance of getting a great price is to attract a Chinese buyer as soon as possible.
But lately, it seems that getting a Chinese to buy your overseas property online may not be as easy as it used to be in the past. The reason for this is that the Chinese government has laid down new rules on overseas property investments, as a part of its campaign to prevent “irrational” acquisitions of assets abroad.
A statement from the State Council, China’s cabinet, said, “Profound changes are taking place in international and domestic situations, and Chinese enterprises face not just relatively good opportunities but also various risks and challenges in overseas investments.”
China wants to stop lending to investors who use the money to invest in properties abroad. The Chinese government warned investors, “Some companies focused on the property rather than the real economy, which, instead of boosting the domestic economy, triggered capital outflows and shook financial security.”
The People’s Bank of China has imposed controls to prevent the outflow of money out of China. In 2021, this was as high as $816 billion, with over $30 billion invested in the overseas property market.
Andrew Polk, co-founder of research firm Trivium China in Beijing tries to make sense of the recent actions by the Chinese government in an interview with Bloomberg News. He says, “This is the state saying we want better say over where China’s resources are going abroad. We didn’t have a clear accounting of this before, but we could piece it all together from what was said by various elements of the government. Now it’s de jure policy while previously it was de facto policy.”
Zhou Hao, an emerging-markets strategist at Commerzbank AG in Singapore adds, “China wants its money to focus on specific sectors that can help boost long-term growth potential. The new policy also tries to close the loophole of suspicious capital outflows and possible money laundering.
Robin Xing, a leading specialist on China at Morgan Stanley in Hong Kong explains that the recent decisions taken by the Chinese government to curb investment in overseas property were a “part of the precautionary package to prevent a rebound in capital outflows.”
He adds,”Policymakers are also concerned about the potential investment loss and financial risk related to the takeover of ‘trophy assets,’ a lesson they might have learned from corporate Japan in late 1980s.”
This has certainly affected overseas property investments made by Chinese buyers. This slumped to 44.3% in 2022, compared to the same period last year. Regardless, Chinese buyers will continue to be the most dominant players in the overseas property market.
Savvy investors will find ways to get around the restrictions imposed by the government. So you should continue to promote your property on Chinese real estate portals, social media, websites, and blogs, as that is still the best way to sell your overseas home for a good price in a quick time.