Zhang Xin, chief executive officer of commercial property developer Soho China and a well-known entrepreneur in China, who bought a stake in the General Motors Building in New York in 2013 on behalf of her family, said she wouldn’t make that purchase today.
“I wouldn’t be making that investment today, full stop. It’s so much more expensive today than in 2010,” Zhang told The Wall Street Journal
“Today, prices are so expensive. I wouldn’t be comfortable making any real estate investments in these major cities around the world,” she said.
Extreme swings in China’s stock markets and foreign exchange markets in recent weeks have spooked investors, and many are wondering where to park their spare cash.
In recent years, Chinese individuals and institutions have been on a shopping spree of real estate investments abroad.
Chinese outbound capital flows into global commercial real estate markets exceeded US$10 billion in 2014, according to property consultancy CBRE Group. Over the past four years, annual China-sourced outbound flows to commercial real estate experienced a compound annual growth rate of approximately 72 per cent.
Earlier this year a report from the China Institute, an Edmonton-based think tank, part of the University of Alberta, suggested that real estate investment by Chinese nationals in Canada has increased more than 200 per cent since 2008 to approximately US$33.7 billion by mid-2014.
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With so much discussion about Chinese investors buying up real estate in Canada and around the world, it’s a tad surprising to hear the CEO of one of China’s larger developers encouraging her countrymen to hold on to their money.