Most Chinese investors, the largest buyer group globally, won’t buy overseas property in next 12 months because of Covid-19: CLSA survey

The coronavirus pandemic has put Chinese buyers off international real estate, a survey conducted last month by brokerage and investment group CLSA has found.

CLSA polled 1,600 respondents in 234 Chinese cities and found that 82 per cent had no intention of buying overseas property in the next 12 months. About 57 per cent said they felt less of an incentive to buy because of the pandemic, compared to just 1 per cent that said they felt incentivised.

“It appears Covid-19 had quite a negative impact on buyer intentions,” a team led by CLSA’s Australia property analyst James Druce said in a report recently. They said the pandemic had hit demand hard and that recovery was expected to be slow.

Only 5 per cent of the respondents indicated they intended to purchase an overseas property in the next 12 months, CLSA said.

These findings are significant because Chinese buyers constitute the largest cross-border buyer group in the world. They accounted for US$21.7 billion or 5 per cent of global real estate investment activity from January to September this year, according to Real Capital Analytics, which tracks deals worth more than US$10 million. They contributed US$41.7 billion or 4 per cent of the total last year.

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40 years of opening up and reform: How property became a driving force in the economy

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According to the survey, 59 per cent of respondents said they would set a budget of US$500,000 to US$1 million for purchasing property abroad, 25 per cent would aim to spend less than US$500,000 and 15 per cent said they would spend between US$1 million and US$3 million.