Hong Kong and China buyers shun historic US homes for new, hi-tech ones
Latest, newest, greatest is the mantra these days for most wealthy Chinese property buyers, who want to be the first to live in the homes they purchase. Agents have had to adjust to their changing tastes
Los Angeles real estate agent Aaron Kirman recently showed a sprawling US$150 million estate to one of his wealthy Chinese clients. The Mediterranean-style villa, originally built in the 1920s, was gracious and elegant, and had elicited much interest from potential European buyers.
“But the [Chinese] gentleman took one look at it, and said, ‘This is too old, get me out of here’,” says Kirman. “He wanted to leave within five minutes.”
Kirman, president of Aaroe Estates at John Aaroe Group, admits he was not surprised by his client’s reaction. While grand, historic estates – think something out of old Hollywood – have a cachet among top-tier buyers, Kirman’s clients from Hong Kong and China are not interested in them.
And like his peers in New York and Miami also serving the ultra-high-end Chinese real estate buyer, Kirman has had to narrow his focus to the sorts of home this demanding demographic finds most appealing.
“It’s very much a cultural thing,” says Kevin Maloney, founder and principal of Property Markets Group, a property developer working in New York, Florida, South Carolina and Chicago. “In America, we’re used to buying homes that other people have lived in. Sales in Miami are fuelled by South Americans and Mexicans, and that’s their mentality also. But with our high-end Chinese clientele, they want to be the first person to live in that home. That’s what they’re looking for, and that’s the client we are catering to.”
With good reason, too. While buyers from East Asia have been brisk investors in residential property in California for decades, it’s only been in the past few years that they have been acquiring the premium homes once earmarked for Saudi royals or Russian billionaires.
As an example of this, take the US$135 million, 18,000 sq ft estate that once belonged to the comedian Danny Thomas. It was built in 1970 but has been restored in recent years and has recently drawn an offer from a Chinese buyer with traditional tastes who appreciated the gold-leaf crown moulding, hand-woven carpets and US$2.5 million worth of Baccarat crystal throughout the property.
But Kirman says his other client from China is interested in a thoroughly modern US$23.35 million Bel Air home completed last year that has a state-of-the-art home cinema and a wine cellar with room for 300 bottles.
Another buyer from China has been circling one of Malibu’s priciest properties (US$60 million), an ornate villa situated on 3.2 hectares of land that includes a 12,000 sq ft main house, plus large guest house and pool house, and suites of offices. The villa is an exercise in grandeur – there is a ballroom with a Romanesque-style indoor pool tiled in Murano glass, with changing rooms panelled in rare onyx. Also on the grounds is a private greenhouse with several thousand orchids and the sort of water features throughout that would pique the interest of those looking for propitious feng shui elements.
Kirman agrees that tastes have changed vastly in the past few years, and real estate agents with wealthy clients from Asia have to be prepared to show properties that wouldn’t have interested such clients until recently.
“A couple of years ago, my clients wanted the very opulent European-style homes, with lots of moulding, gold leaf, and marble throughout,” says Kirman. “But today, it’s more all over the board stylistically. We’re still seeing a demand for European grandeur, but we have more and more clients going for the very modern new homes.”
Kirman, like other estate agents, has found that the volatility in the Chinese stock market has boosted interest in prestigious US properties. “I’ve seen a 45 per cent increase in inquiries from Chinese buyers for my highest priced properties in the last quarter of 2015 compared to the same period in 2014,” he says.
He is showing more than a dozen homes – priced from US$15 million to US$135 million – and all are seeing a spike in interest from potential Chinese buyers. Kirman has also partnered Juwai.com, a property-focused website that features luxury properties around the world. He says his most popular properties are in the US$10 million to US$25 million range.
But just as his clients are relinquishing their previous notions of what a pedigreed home in the US should look like, they are also expanding their areas of interest: in the past, he says, Beverly Hills was the holy grail, with buyers hankering for the 90210 zip code. While Bel Air may have some of the finest and most elite properties in the world, his Chinese buyers didn’t feel that Bel Air had quite the same recognition as Beverly Hills.
“Beverly Hills, to them, is the city of cities,” Kirman says. Still, they are also willing to look at homes in Malibu – something that was beyond the realm of possibility a couple of years ago. Striking, glass-walled homes that are architectural wonders are finding favour with a younger demographic, although they remain partial to properties with guest houses for parents and grandparents.
Ying Peng, market consultant at ISG China/International Sales Group in Miami, which represents prime developments in South Florida and New York, says a previous craze for ornate and opulent homes has morphed into a mandate for technology.
“Most of my clients are from Hong Kong and China, and they are mainly interested in smart homes, including smart parking, where the car is stored through robotic technology,” she says. “They are less interested in the big mansions. They want the modern Miami lifestyle.”
Peng says there are avid buyers from Asia interested in the new Carlos Ott-designed apartment building Echo Brickell, shaped like a streamlined glass wave, where the upper penthouse is priced at US$41.8 million – although that does include an exclusive Ott interior as well.
Peng says architects who have been associated with other properties familiar to her Chinese buyers will always attract their attention: in Ott’s portfolio are dramatic buildings such as the Burj Al Arab in Dubai, the Hangzhou Grand Theatre in Hangzhou, and the Shanghai Harbour International Passenger Terminal.
Maloney says 10 per cent of his buyers in New York are now wealthy Asians, and developers are catering to their aesthetic priorities which, in New York anyway, is all about “great finishes, great appliances, every convenience, all the technology possible”.
“For this market, it has to be the latest, greatest, newest. If there is a building that’s two years old, it’s too old. If there is a building a block away that’s only 60 per cent complete, they’ll buy that instead.”