China’s millionaire machine slows

China’s millionaire machine has slowed, suggesting that the country’s economic weakness is reaching the top of the economy.

China’s millionaire population grew 3.6 percent last year, adding 100,000 millionaires and bringing its total millionaire count to 2.9 million, according a new report by the Chinese wealth website Hurun. The growth rate marks a sudden slowdown from the double-digit millionaire growth in China in recent years.

By contrast, the U.S. added 640,000 millionaires last year, bringing its total to 9.63 million, according to Spectrem Group. Spectrem defines millionaires as households with investible assets of $1 million or more. 

A man exercises in front of residential buildings along the Shing Mun River in the Sha Tin area of Hong Kong, China.

Jerome Favre | Bloomberg | Getty Images
A man exercises in front of residential buildings along the Shing Mun River in the Sha Tin area of Hong Kong, China.

The number of Chinese worth $16 million or more grew 4 percent to 67,000, according to the report from Hurun and the Industrial Bank. 

Of the 100,000 new millionaires, 30,000 were in Shanghai, 17,000 in Guangdong and 15,000 in Beijing. Beijing still has the most millionaires in China, with 490,000, according to the report.

The report also looked at the health and hobbies of Chinese millionaires. It said the overall “spiritual satisfaction” of Chinese millionaires is relatively high, while the richer millionaires show even higher degrees of satisfaction.

But China’s notorious pollution levels are reaching the penthouses: 87 percent of Chinese millionaires are dissatisfied with pollution levels.

Chinese millionaires spend an average of three hours a week exercising, with jogging, badminton and swimming listed as their top three forms of exercise.

Richest self-made billionaires in Asia

Patrik Stollarz | AFP | Getty Images

They read an average of 10 hours a week, but richer millionaires read 15 hours a week.

“Chinese millionaires are setting aside more time than I expected towards reading and learning, as well as exercise,” said Hurun Report Chairman and Chief Researcher Rupert Hoogewerf.

The top three hobbies of the Chinese rich are fine dining, travel and exercise. Millionaires traveled an average of once a year and spent an average of $10,000.

—By CNBC’s Robert Frank

Australia among top destinations for Chinese property investors

SYDNEY – Australia has become one of the most popular destinations for Chinese property investors, with nearly A$6 billion ($5.42 billion) invested by Chinese buyers in the local real estate market in the last financial year, local media reported on Monday.

 

 

Australia among top destinations for Chinese property investors

Chinese rushing for overseas properties 

 

Australia among top destinations for Chinese property investors

Top 10 trading partners of the Chinese mainland 

Chinese nationals are estimated by some financial institutions to be buying around 12 percent of the country’s new homes, according to the Australian Broadcasting Corporation (ABC).

The Australian Federal Parliament’s House Economics Committee is reviewing the foreign investment laws amid fears that the local property market prices are being pushed up by overseas investors.

Kelly O’Dwyer, who chairs the House Economics Committee, told the Radio National Breakfast on Monday that the inquiry into foreign investment rules would determine whether they are still achieving the purpose, which ensures that overseas money adds to Australia’s housing stock and does not push up prices for locals.

A report by global financial services firm Credit Suisse predicted that by 2020, about 18 percent new Sydney homes would be bought by Chinese buyers while in Melbourne new home market, Chinese buyer would grow to 14 percent.

Up to A$44 billion ($39.7 billion) of property investment is expected from Chinese investors in the seven years to 2020, the report says.

 

 

Australia among top destinations for Chinese property investors

 

Australia among top destinations for Chinese property investors

夏威夷房地产 – Shanghai developer to build big in LA

After unveiling its $2 billion investment plan in London last month, Shanghai-based Greenland Group announced new details of its $1 billion Metropolis Los Angeles project on Feb 14.

The proposed Metropolis Los Angeles project is expected to be one of the largest mixed-use developments on the West Coast and to reshape the Downtown Los Angeles urban landscape. Metropolis is the Greenland Group’s first investment in the US.

Phase one of Metropolis is expected to include the development of a four-star luxury hotel and a residential tower with units ranging from studios to two bedrooms. The hotel will have 19 floors with 350 rooms, and the residential tower will be 38 stories high. Construction is slated to start early this year and be completed by mid 2016.

“Founded in Shanghai 22 years ago, Greenland Group has since expanded to more than 80 cities across China and is known as a leading developer of high-quality, high-rise residential and commercial buildings and urban complexes,” said Zhang Yuliang, chairman and president of Greenland Group.

“International expansion — particularly in the US market — is a strategic priority for us,” Zhang added. “We are making significant investments in the US and as one of the iconic cities of the world, Los Angeles is an important place for us to be.”

“We are excited to welcome the Greenland Group to Los Angeles,” said Mayor Eric Garcetti. “This billion dollar investment will not only bolster Downtown Los Angeles’ economy by creating hundreds of jobs and generating on-going tax revenue, but it will bring the kind of world-class amenities that will enhance the appeal of our city center nationally and internationally.”

Los Angeles Councilmember Jose Huizar said, “The revitalization and economic resurgence of Downtown Los Angeles over the last decade has really put it on the map as a dynamic urban center — the kind that every great city should have. The message is clear, Downtown LA is open for business and that is attracting prestigious international companies, such as Greenland Group, to make a long-term financial commitment in Downtown LA and be a part of this momentum. We welcome Greenland Group’s investment and look forward to this project’s contribution to the success of Downtown for years to come.”

For phase one of the development, Tishman Construction is providing program and construction management services. Gensler, a leading design firm, will serve as the architect. Turner Construction will be the general contractor and SPAN Architecture will be the interior designer. Rider Levett Bucknall will provide surveying services.

Located on Francisco Street between 8th and 9th Streets, the property is the largest undeveloped site in Downtown LA’s central business district and is situated near popular arts and entertainment, retail and dining establishments such as LA LIVE, FIGat7th, Bunker Hill, the Walt Disney Concert Hall, the Museum of Contemporary Art and the soon-to-be-opened Broad Museum.

Downtown Los Angeles has experienced an unprecedented renaissance in the last 15 years and is considered to be the place to live, work and play. It is home to a growing residential population of more than 53,000 who are seeking an active, urban lifestyle and more than half a million office workers.

“We believe Los Angeles’ location as a gateway between Asia and North America is ideal in attracting an international clientele who are seeking investment opportunities and an exciting lifestyle near arts and entertainment, sports and fine dining,” said Zhang.

“Greenland Group has strong confidence in the market demand for this project,” Zhang added. “Los Angeles is the second largest city in the United States with the largest seaport and industrial center on the West Coast. It has a stable economy and a large population base with one of the largest concentrations of international immigrants.”

In 2013, Greenland Group was ranked 359th on the Fortune Global 500, 55th among the Top 500 Chinese companies and number one among Chinese real estate enterprises. The company has built or is currently building 23 skyscrapers, with four of its buildings ranked among the 10 tallest in the world.

China’s rich fleeing the country—with their fortunes

It’s one of the largest and most rapid wealth migrations of our time: hundreds of billions of dollars, and waves of millionaires flowing out of China to overseas destinations.

According to WealthInsight, the Chinese wealthy now have about $658 billion stashed in offshore assets. Boston Consulting Group puts the number lower, at around $450 billion, but says offshore investments are expected to double in the next three years.

A study from Bain Consulting found that half of China’s ultrawealthy—those with $16 million or more in wealth—now have investments overseas.

And it’s not just the money that’s exiting the country. The wealthy are increasingly following their money overseas.

A study by Hurun and Bank of China found that more than half of China’s millionaires are considering emigrating or have already taken steps to move overseas.

Many experts say that the wealthy are moving to protect their wealth, their health and their families. With China increasingly cracking down on ill-gotten gains and corruption, many of the politically connected wealthy are looking for safer havens abroad.

They are also looking for better environments for their children—with better schools and cleaner air.

“Whether it is the perceived political instability or perhaps lack of educational opportunities, or pollution in the urban environments there, when you put those altogether … and you mix that with the wealth that’s present in China now, it really makes sense that there are folks there looking to explore these opportunities,” said Peter Joseph of the Association to Invest in the USA, which represents investor-visa programs in the U.S.

Some say the capital flight and millionaire migration are normal consequences of rising wealth. Oliver Williams, of WealthInsight, said that the Chinese wealthy have about 13 percent of their wealth overseas—below the global average of 20 percent to 30 percent.

Still, much of China’s offshore wealth is moved illegally or in the shadow economy. China maintains a closed capital account and Chinese citizens are generally not permitted to move more than $50,000 out of the country. So reliable data on exactly how much money is moving out remains unclear.

But the global buying spree by wealthy Chinese suggests the numbers may be far higher than reported. Wealthy Chinese buyers purchased more than $8 billion worth of residential real estate in the U.S. in the 12 months ended in March, according to the National Association of Realtors. China’s share of foreign-purchased residential real estate has jumped 50 percent since 2011.

One of China’s richest women, Zhang Xin of developer SOHO China, recently bought a townhouse in Manhattan for $26 million, according to reports.

China’s wealthy also are pouring money into collectibles and art. Billionaire Wang Jianlin and his company Dalian Wanda last month bought a Picasso at a Christie’s auction for $28 million. Bidding from Chinese buyers was strong throughout the auctions, according to dealers and gallerists.

It’s also going to wine and diamonds. Diamond dealers say more than half of today’s collectible diamonds are going to Chinese buyers. And on Saturday, the world’s most expensive case of wine—1978 Romanée-Conti—sold in Hong Kong for $476,000.

—By CNBC’s Robert Frank. 

Chinese buying up California housing

At a brand new housing development in Irvine, Calif., some of America’s largest home builders are back at work after a crippling housing crash. Lennar, Pulte, K Hovnanian, Ryland to name a few. It’s a rebirth for U.S. construction, but the customers are largely Chinese.

“They see the market here still has room for appreciation,” said Irvine-area real estate agent Kinney Yong, of RE/MAX Premier Realty. “What’s driving them over here is that they have this cash, and they want to park it somewhere or invest somewhere.”

Yong’s phone has been ringing off the hook, with more than 5,000 new homes slated for the nearby Great Park Neighborhood. Most of the calls are from overseas, but prospective buyers are not looking solely for financial returns on the real estate.

“We are seeing a lot of Asians who are buying as an investment, but their kids are going to school here, so kids live in the home. They are looking at it more as an investment in education,” said Emile Haddad, CEO of Fivepoint Communities, developer of the Great Park Neighborhood.

That is Brian Yang’s plan. Speaking from his home in China, Yang said he purchased a home in Irvine this year, but he will wait five years, until his daughter turns 10, before moving his family to the U.S. He has several reasons for taking the leap.

“Education in America is very good and world class, so the first one is for education, and I think the second one is for the property appreciation,” explained Yang.

While American secondary schools and universities are a big draw for the majority of Chinese buyers in California, Yang, and many of his colleagues, are also concerned about China’s political instability, inflation, even pollution. They are paying all-cash for real estate in California, using it as a safe-haven for their wealth. Yang was reluctant to talk about the money, but he admitted, “I feel the same way to some extent.”

For now, Yang is renting out the four-bedroom home, and, he said, getting a 5 percent return on the investment.

While Yang purchased an older home, the new model homes at Great Park are drawing thousands of potential buyers. In fact, more than 20,000 attended the opening weekend, according to developers. The vast majority of lookers were Asian, and that fact is not lost on the builders. Hoping to cash in on this new wave of investors, they are tailoring the homes to the demand. Some are incorporating multigenerational floor plans and even Feng Shui designs.

“The imbalance of supply and demand here is really driving a lot of competition for these homes,” said Haddad.

The homes range from the mid-$700,000s to well over $1 million. Cash is king, and there is a seemingly limitless amount.

“The price doesn’t matter, 800,000, 1 million, 1.5. If they like it they will purchase it,” said Helen Zhang of Tarbell Realtors.

Zhang was coming out of one of the models with a Chinese couple pushing a toddler in a stroller and carrying an infant. As our CNBC camera crew interviewed Zhang, another group of potential buyers roaming the neighborhood models raised their brochures to hide their faces when they saw the camera.

While no one would say specifically why certain families were shying away from the media, some alluded to the fact that many of the buyers don’t want any questions about where the cash is coming from. Some are buying multiple homes as investments, while others are moving their families to the U.S., intending to stay at least until their children graduate from college.

By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.
CNBC’s Stephanie Dhue contributed to this report.

 

 

China’s Crazy Rich House Hunters

You almost want to call it a bubble, don’t you?

In the global real estate biz, China is the buzz. Every other week there is a story about how much money the Chinese are spending abroad on real estate. I’ve done them here a number of times myself. And it seems there are companies sprouting up designed to cater to China’s uber-rich; from Affinity China to Bomoda, there’s a savvy entrepreneur out there luring starry-eyed, super rich and a little impractical Chinese from buying a part of the Western dream.

Like Honiley Hall in Warwickshire in the U.K. It’s only about $15 million dollars. But that comes with 35 acres of land and a driveway that is bigger than most back yards at 1,312 feet long.  This isn’t a house for the curious to go look at it and dream big. This is by appointment only. This is a house for the rich. And judging by an ad from the Peter D. Warwick’s namesake luxury property firm PDW, it’s mostly for the Chinese with lots and lots of crazy cash to burn.

These guys are just over-the-top now, aren’t they?

If they’re not buying up Sunseeker yachts just because they are the ones seen in the latest Bond movie, they’re out spending hundreds of thousands of dollars on American style weddings.  Remember the Happy Meal toys and the dollar-a-day Chinese? Apparently, those people no longer exist in China. Everyone in China now is a millionaire and Americans and Europeans want to sell them the high life.

Starting this weekend, some 14,000 high-net worth Chinese will attend the Top Marques super luxury expo in Shanghai and guess who is going to be there? How about Miami real estate firms? How about realtors from the English countryside?

Miami real estate broker Jorge Martinez of Worldwide Properties, together with co-founder Roland Ortiz, and senior agent, Olimpia Zanardi, will be the first American real estate agents at the expo to showcase property alongside private jets and Ferraris. They’ll be touting their wares: $2 million South Beach penthouses at Venetian Way.

If you’re from Miami and thought your real estate values weren’t priced to match the state’s 7% unemployment rate, blame a rich foreigner.  This isn’t to incite riots, of course. But the rich love Miami, and the Chinese love Florida, second only to California as their go-to state for second or third homes.

“For wealthy Chinese, a Miami penthouse is as much a lifestyle purchase as a $500,000 car, luxury purse or a case of $5,000-per-bottle wine” said Martinez.  ”Our intention is to penetrate a new market. Chinese are investing in the U.S. more now than ever before and we want Worldwide Properties to be the agency that brings them to South Florida.”

Paradise Waters. If you have to ask where it is, it’s probably because you can’t afford it.

Top Marques is usually just for expensive toys. But this year, expensive housing is up for a look, too. It’s one more expression of how Chinese high-net-worth individuals have become so internationally sophisticated, and so wealthy, that they can pick up second homes in other countries like they would a designer purse or car. It is also a sign that Western real estate agents are waking up to the Chinese market, and starting to target these guys aggressively.

“Top Marques is a a very select audience,” said Andrew Taylor, CEO of Juwai.com, an internet portal helping Chinese buyers peruse international real estate listings. “At Top Marques, you know you are marketing to people who want the very best — and can afford it.”

Chinese buyers will spend $8.2 billion on American houses this year, according to the National Association of Realtors.  That translates into $492 million in commission for American real estate agents thanks to China.  Approximately 70% of Chinese buyers will pay cash.  And while most of them are not buying multi-million dollar manors, the U.S. is the number one destination for Chinese property investors in 2013, according to Juwai.com data.

The Miami Association of Realtors says Florida is “a top state” for foreigners, with Miami claiming the most investment. This year, the Association is traveling to China for property shows and business meetings in Chengdu, Guangzhou, Shanghai, Beijing and Hong Kong.

Kenneth Rapoza, Contributor

InvestHK building bridge for mainland companies to go global

With the 17th China International Fair for Investment and Trade set to open on Sunday in Xiamen of southeast China’s coastal Fujian province, China Daily’s Zhang Haizhou sat down with Victoria Tang, associate director-general of Invest Hong Kong, to discuss the flow of investments between the mainland and the special administrative region, and how the financial hub of Asia connects mainland investors with the world.

Why are you attending this year’s CIFIT, and what is the significance of the event?

At CIFIT this year, Invest Hong Kong is pleased to continue organizing a seminar and media conference on Sept 8 to promote the business advantages of Hong Kong.

It focuses on service industries and will encourage more mainland companies to “go global”.

Invest Hong Kong will also work with the Hong Kong Trade Development Council to host a Hong Kong Pavilion at CIFIT.

The pavilion will feature a thematic design of “Windows of Infinite Opportunities” to highlight the role of Hong Kong as an international business platform offering high-quality professional services, and strengths in logistics, finance, eco-friendliness, fashion, entertainment and product design.

How big is Hong Kong as a destination for investment from the Chinese mainland?

The mainland market is the largest source of inbound direct investment into Hong Kong. According to a government survey, more than 250 mainland companies were maintaining regional operations in Hong Kong to oversee or coordinate their business on a global or regional scale as of last June.

For the first half of this year, Invest Hong Kong has assisted a record 213 overseas and mainland companies to set up or expand in Hong Kong.

The interim results were encouraging because they showed continued strength despite challenging global conditions.

The 213 completed projects came from 33 different markets.

In what ways can mainland investors get help from Hong Kong in their global endeavors?

We have seen an upward trend in investments from mainland companies in Hong Kong, covering a wide spectrum of businesses, such as wholesale and retail trade, financial services, logistics, construction, information and communication technology, hospitality and tourism as well as consultancy services.

As an international financial, trade and shipping center, Hong Kong offers a free, open and liberal market economy.

Hong Kong scores highly for its business-friendly environment, rich experience in international marketing, robust regulatory regime, world-class infrastructure and rich pool of skilled professionals and services staff.

Are there any restrictions or barriers for the mainland’s firms to invest in Hong Kong? Does Hong Kong have a preference for firms from any sectors in particular?

There is generally no entry barrier to direct investment in Hong Kong and we offer all a level playing field.

Mainland companies are welcome to set up or expand in Hong Kong and use the place as a “testing ground” for expanding overseas.

Service industries currently account for some 93 percent of Hong Kong’s GDP.

Investors often set up regional headquarters or regional offices in Hong Kong for sales, marketing, distribution, finance, management and R&D functions and form strategic partnerships with Hong Kong entrepreneurs.

What are the major advantages of Hong Kong compared to other attractive destinations at a time when increasing numbers of mainland investors are going global?

Hong Kong ranked third in terms of global Foreign Direct Investment inflows in 2012, according to the United Nations Conference on Trade and Development’s World Investment Report 2013.

Hong Kong’s enduring advantages, including its low and simple tax regime, rule of law, free flows of information and capital, and a workforce with an international perspectives, continue to make it a desirable platform for overseas and mainland investors.