Joe Biden expected to be friendlier to foreign investors, property market observers say
- Investors from China expected to feel more welcome in the United States
- Biden’s policies on coronavirus and economy could drive up prices
President-elect Joe Biden is likely to be more friendly towards foreign investors, immigrants, renters and students than US President Donald Trump, but he might also implement taxes that are less favourable to the rich, market observers said.
Perhaps the relationship between the United States and China will not go back to what it was, but Biden will be viewed by investors – local and foreign – as a more rational leader, said Georg Chmiel, executive chairman of Juwai IQI, a privately held real estate sales and media company. Biden will be more interested in stability and economic growth than Trump, he added.
“Most Chinese clients [whom] we work with believe Biden will be more friendly to investors from overseas than President Trump has been,” Chmiel said. “Biden might reverse some tariffs and have a more pro-immigrant and pro-student stance. Parents will feel less worried about sending their children to the US under Biden. They think the Chinese will be more welcome in the country.”
The US-China trade war has dealt a blow to investments in US property by Chinese investors. The volume of purchases of US homes by Chinese buyers in 2020 stood at US$11.5 billion, or just about a third of levels seen in 2017, when Trump took office and the numbers started a three-year decline, according to National Association of Realtors data. The number of purchases have also plummeted this year, by more than half from 40,600 in 2017 to 18,400 transactions.
Biden is also more likely to control the US’s coronavirus outbreak, launch a realistic stimulus package and build a significant amount of infrastructure, all of which could drive up prices, Chmiel said. “He will build housing. He will support renters,” he added. “All of these policies tend to increase property values.”
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Under the new regime, investors in Democrat-leaning “blue states” New York, New Jersey, Connecticut, California and other high-income states could save significantly on property tax as Biden was likely to repeal a rule that prevents people from itemising the tax as an expense, which would be a “big boost” for home prices, Chmiel said.
But where Trump was likely to try and reduce the capital gains tax rate, Biden “would like to see it increase for those earning in excess of US$1 million”, as a way of raising revenue to fill holes in the budget and to follow through on proposed health care coverage expansion, said Naomi Budden, the founder and managing director of Nest Property, a real estate agency.