If you’ve been following Mauricio Umansky‘s travels over the past year, you are well aware that he has been spending some time in China, and there is a good reason why. As Lauren Schuker of The Wall Street Journal reports in her article “Courting the Chinese Buyer,” a new wave of buyers from China is drastically changing the landscape of the U.S. luxury real estate market, “snapping up” homes from Los Angeles to New York and injecting billions into the residential market here.
As an example, Schuker points out The Agency’s listing on 9577 Sunset Boulevard, which recently sold to a Chinese couple for a reported $34.5 Million. The purchase is the biggest residential sale in Los Angeles so far in 2012. She also refers to the recent sales success of The Agency’s development client, The Ritz-Carlton Residences at L.A. LIVE, where half of the recent buyers are from Asia. Singaporean businessman Steven Loh, for instance, recently purchased six homes at The Ritz-Carlton Residences. Mr. Loh, Schuker reports, wanted to “get a jump on the market before property values rise.”
Another new homeowner at The Ritz-Carlton Residences at L.A. LIVE is Di Meng, a 23-year-old USC student from Beijing who opted for a home at the luxury residential tower in Downtown Los Angeles in lieu of student housing. Di Meng tells The Wall Street Journal: “Compared to China, the United States is relatively stable. China has a purchase limit policy because the Chinese government tried to control and cool down the housing market in China, so if you’ve already bought a home in China, they do not support you to buy another.”
Umansky addressed the political instability that currently exists in China in an article he wrote for Beverly Hills Magazine this past February.
“First, the political risk in China is high, and people are scared that one day they will wake up and their money will be gone – the banks nationalized and bank accounts seized,” noted Umansky. “Second, the devaluation of the American dollar and the strong Chinese currency makes U.S. prices seem like a bargain. Combine this with the recession and 30% reductions in pricing, and you get the perfect storm.”
Indeed, that perfect storm has led to $9 Billion in U.S. home sales by buyers from China and Hong Kong over a 12 month period ending in March 2012, and most experts suspect it’s even more considering the large number of private sales transactions not officially reported.
For more on how Asian buyers are changing the luxury real estate landscape in the U.S., read the full WSJ article here.
(Above photo: Nighttime view from inside a home at The Ritz-Carlton Residences at L.A. LIVE)
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