Chinese Investors Moving Outbound FDI To EU Real Estate

Chinese FDI In Europe

According to ongoing reports by CoinDesk, Chinese speculators purchase properties abroad fundamentally because of the new guidelines limiting trade in digital money in the local markets.

As a result, numerous Chinese cryptographic money moguls spend on land outside China and exchange through digital currency, which includes the investors who want to buy properties through bitcoin to move money overseas through trade deals. 

The US and UK real estate markets have the highest demand for such deals, as the highest number of such traders are from Asia, mostly China, who want to move money through the Hong Kong route outside; the Chinese government imposed restrictions on property buying overseas.

Nevertheless, buyers still seek options outside China's negative real estate growth. In the last six months, real estate in China had the weakest growth due to tighter fund regulations and the imposition of new rules on property developers. 

In June 2018, growth was 8.4 per cent (9.8 per cent in May), as per Reuter's calculations (NBS). In addition, the government authorities claimed they would reduce subsidies on property buying in leading cities of China to diversify funds to other underdeveloped regions and impose restrictions on buying overseas.

FDI Outbound to Europe

In 2018, most investors from China were moving investments from North America to the EU. The statistics reveal the FDI from China to the EU was $16.63 billion in the first half of 2018, compared to $2.5 billion in North America. 

Baker Mackenzie – the global law firm claims the new mergers and acquisitions by China show divesting trends from North America worth $9.6 billion, where most investments went to top locations of the EU real estate, hospitality, automotive, health, and other sectors. 

At least $1.6 billion went to the UK and $1.5 billion to Germany, Sweden, and France. 

• MSCI Real Estate market report claims the property market globally grew 15 per cent to $8.5 trillion last year. In the UK and Germany, market size increased by over $100 billion, and Germany became the 4th largest real estate market in the world, replacing China in 2017.  

• Sweden, Switzerland, Spain, and Norway are part of the upcoming development in Europe – as estimated by the overall GDP. 

• The US was the largest growing market in the world in 2017, but China is now investing at least nine times more in Europe. Sweden is the main market for Chinese buyers in 2018, followed by the UK. 

• Germany and France are other key areas of China's FDI. The outbound FDI of China decreased 92 per cent in North America from US$24 billion to US $2 billion, and the interest in the EU was up to $20 billion in the initial half-year itself.

Trade policies and global trade tensions are responsible for low local investment, but overseas investment grew in the EU. The Brexit uncertainty has lowered pound rates, increasing the cost of imports and opportunities for overseas UK investors. 

For additional info on real estate rates and options in Europe and the UK, click Hamilton International Estates (www.hamiltoninternationalestates.com).