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The mainland tightens foreign exchange outflows

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2019-03-27 05:38:54

Three hundred to five million luxury home transactions slowed down. According to the intermediary, the transaction was shelved because the funds could not be put in place.

 

20% of Manhattan's luxury home buyers come from China and Russia. (SAUL LOEB/AFP/Getty Images)

 “Because mainland foreign exchange controls have become stricter, Manhattan’s 3 million and more than $5 million in luxury home transactions have slowed down, but one or two million real estate transactions have not been affected and trading has been flat.” Recently, the National Association of Asian American Real Estates (AREAA) Gao Guohua, president of the New York East Conference, said at an event.

Gao Guohua said that Chinese buyers are one of the main players in the New York real estate market, accounting for about 20% of New York real estate transactions. The buyers of high-end real estate in Manhattan are mainly from mainland China and Russia. Due to the increase in foreign exchange control in the mainland, recent transactions have often been affected, and there have been cases where funds cannot be fully in place. "There are several customers who are optimistic about the house, but the money can't come out, and there is an urgent need there."

Before this year, the mainland did not review the use of foreign exchange for exchange, and it was necessary to change $1 million to find 20 relatives, friends and employees. However, it is now reviewed for the use of exchanges, and the regulations cannot be used for housing purchases. The funds are not in place, which makes the transfer time of many transactions prolonged.


On December 31 last year, the Continental Foreign Exchange Administration issued a quota of 50,000 US dollars per person per year, and stipulated that it should not be used for overseas capital purchases, securities investment, purchase of life insurance and investment return bonus insurance. Those who violate the rules will be blacklisted and cancel the two-year purchase of US$100,000. In exchange for foreign exchange, the public is also required to explain the purpose. For travel, a passport visa is required, and for tuition fees, information such as proof of attendance is required. The impact on retail investors is also dragged down by high-end customers. "This regulation has an impact on the transfer of private retail capital out of the country, and it has also affected high-end customers. Because the strengthening of foreign exchange controls is comprehensive, the impact on Chinese is greater than expected."


Faraday, a real estate agent of Flushing's real estate company, said that two months ago, a mainland consortium intended to buy a good price for a plot of 40,000 flats in Amherst and the Corona area. It has been negotiated, but the funds have gone out of business and the transaction has been dragged down.
“Exemption of foreign exchange controls will also have an impact on Flushing real estate transactions.” Zhang Lifa, a real estate company broker, said that Flushing’s property is mainly based on new immigrants and mainland funds. Now Flushing’s house prices are close to Manhattan, so expensive. First, the locals do not have so much money to buy, and second, locals with so much money, he is more willing to buy in Manhattan and the environment better, instead of choosing Flushing. If the mainland's funds come in difficult, it will affect the property market in Flushing.
Want to buy a house in the United States, you need to transfer money in advance
Gao Guohua said that due to the depreciation of the renminbi, many Chinese buyers expressed concern about the money placed on the mainland and tried every means to transfer the money as soon as possible.
She said that SoHo and Midtown Manhattan are the areas with the most real estate investment potential. Many Chinese buyers choose to buy houses nearby. Chinese people buy houses that are biased towards school districts. Long Island, Manhattan, Bayside and other school districts are good. The houses are very popular. For example, New York University (NYU) has a lot of Chinese students, and the nearby houses are quite popular. In addition, the houses in Houston and Dallas are cheaper than New York, with large space and large yards, which are also popular among Chinese people.
She suggested that Chinese buyers who want to come to the United States to buy a house should transfer the money in advance. "If the money doesn't come out, it will be useless to look at the house because the seller will not wait."
When you are in the mainland, you can consult with a bank or financial advisor, go online or through some big real estate companies to get to know the school district and location first. Don't consider these things after you go abroad, so as not to find out that the funds can't be transferred.
Moreover, industry insiders still have confidence in real estate in New York, Christine CJ Delvecchio, president of the New York State Real Estate Brokers Association, and Moses Seuram, secretary general, said that Trump promotes US priority, allowing companies and jobs to return to the New York real estate market, and New York City is the world's financial center. Global capital is gathering here. The US housing market and stock market will be thriving during the Trump period.
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Tags: flushing's real estate foreign exchange transactions new york real estate chinese buyer russia
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