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Chinese government policy change kills Coastal California housing market
invite response
2014 Aug 24, 10:54pm 1,047 views 3 comments
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Strategist
2014 Aug 24, 11:24pm
Most California real estate market bulls and enthusiasts blithely assume the influx of Chinese money will never stop because everyone in China wants to live here, right? Unfortunately, in the real world, for money to leave China, it generally has to pass through a Chinese bank and get wired to an overseas location. The Chinese government could easily stop the flow of electronic capital by decree, and it appears they plan to exercise this power to shut off the flow of Capital leaving China for US real estate.
The Chinese already control outflow of capital. WTF. The Chinese just find creative ways to break the rules.
lostand confused
2014 Aug 24, 11:28pm
Well FATCA may be to blame. Obozo the clown signed this law that forces all banks all over the world to spy on American citizens and turn over details of their accounts. if not, they will be heavily penalized. many banks have since stopped doing business with Americans overseas.
Now China has refused to comply and has instead asked America to provide all details of assets held by its citizens in America. if that deal goes through, then it will have an enormous impact on Chinese buyers-who will shift their assets to non FATCA countries.
REpro
2014 Aug 25, 8:09am
I think Chines are worry more about oversupply economic shock which can put many businesses out than restriction placed on money outflow.
http://ochousingnews.com/blog/chinese-government-policy-change-kills-coastal-california-housing-market/
Coastal California housing demand from Chinese nationals surged in recent years; however, Chinese officials abruptly shut down this source of demand.
The people who deny a real estate bubble in China are wrong, and the deflating Chinese property bubble could destabilize the world economy, but of greater interest to owners of Coastal California real estate, the deflating Chinese housing bubble could turn local real estate buyers into desperate sellers.
Both homebuilders and real estate agents delude themselves with notions about the desirability of Coastal California to convince themselves the influx of Chinese money is based on sustainable fundamental factors. In reality, this is hot money escaping a collapsing market, subject to the policy whims of an unpredictable totalitarian government. Chinese capital is an unstable source of investment, and it could reverse course in a moment based on policy changes in China.
Most California real estate market bulls and enthusiasts blithely assume the influx of Chinese money will never stop because everyone in China wants to live here, right? Unfortunately, in the real world, for money to leave China, it generally has to pass through a Chinese bank and get wired to an overseas location. The Chinese government could easily stop the flow of electronic capital by decree, and it appears they plan to exercise this power to shut off the flow of Capital leaving China for US real estate.
Source: http://ochousingnews.com/blog/chinese-government-policy-change-kills-coastal-california-housing-market/#ixzz3BPM2hvAv
#housing