The continuing slide of the euro is leading to an increase in Chinese nationals looking to buy European properties. While Chinese investors have been steadily purchasing European real estate over the past few years, especially after the economic slowdown in Europe caused several European states to introduce investor residency schemes, now institutional Chinese investors are also increasingly getting involved due to the fall in the Euro.
Several property agents are reporting an increase in interest in commercial property as well as hotels across Europe from Chinese investors seeking a return of 5% or higher. According to Zhang Kesong, a property agent in Beijing specializing in the European real estate market, “The falling euro has significantly slashed the cost of travelling to and investing in Europe, and more people are tempted to invest there.”
For Chinese nationals, European property prices have effectively fallen by almost 15% in the past year. A €500,000 property in Spain that would have cost over 4.1 million Yuan in May last year would currently set them back 3.5 million Yuan.
Among European countries, Portugal is notable for the level of interest generated among Chinese investors. Portugal grants residency to non-European investors spending at least €500,000 on property. Of the 1,775 residency permits issued over the past two years, 80% were granted to Chinese nationals.
Chinese overseas property investment by individuals stood at US$15 billion in 2014, with the United States, United Kingdom and Australia being the most popular locations. Chinese institutions have reportedly invested almost US$13.5 billion in foreign property last year, more than twice the amount invested in 2012, with the UK and France being the top European locations. Most institutional investors purchased office blocks and hotels which had returns of between 5% and 8%.