Chinese developers are starting to venture overseas, chasing wealthy locals who are buying apartments from New York to Sydney as the government restrains the property market at home.
In September Xinyuan Real Estate took control of a lot slated for more than 200 units of housing near New York's Brooklyn waterfront for US$54.2 million, a deal the Beijing-based company said was the first of its kind by a Chinese firm in the United States.
Country Garden Holdings, the developer controlled by China's richest woman, said this week it would buy waterfront land in Malaysia.
China Vanke, the country's biggest builder, set up international units to expand overseas after it acquired a Hong Kong developer in May. Shanghai Greenland Group is spending 8 billion yuan (HK$9.85 billion) on projects in Australia.
"There are Chinese people who have a lot of money and have soured on China's real estate market," said Patrick Chovanec, from Tsinghua University's School of Economics and Management in Beijing.
"[Developers realise] the return on investment going forward is not necessarily going to be the same as in the boom years," he said. "They know that the game is changing and they have to change their business model to adapt and to survive."
Beijing is maintaining property curbs introduced in the past two years to cool prices, including home-purchase restrictions in about 40 cities and a property tax in Shanghai and Chongqing , as well as studying a nationwide property tax.
That has sent wealthy buyers abroad. The Chinese were the second-biggest overseas purchasers of US property, after Canadians, in the year to March. They accounted for 11 per cent of sales to international clients, according to the Chicago-based National Association of Realtors.
China's developers, in their first tentative steps abroad, have avoided high-profile purchases that attract media attention and concern over foreign ownership.
That contrasts with Japanese buyers in the 1980s and 1990s who snapped up US properties, including the Rockefeller Centre. Many of the purchases were later sold at a fraction of their cost as Japan's asset bubble burst. "China has learned a lesson from the Japanese experience," said Michael Klibaner, from Jones Lang LaSalle.
Chinese developers are focused on building the capability to undertake projects on foreign turf, either by buying local companies or entering into partnerships.
Until now, these developers have focused on the home market.