Beijing is now ground zero for the world's largest cross-border residential property boom.
Motivated by a weakening yuan, surging domestic housing costs and the desire to secure offshore footholds, Chinese citizens are snapping up overseas homes at an accelerating pace. They are also venturing farther afield than ever before, spreading beyond the likes of Sydney and Vancouver to lower-priced markets including Houston, Thailand's Pattaya Beach and Malaysia's Johor Bahru.
The buying spree has defied Chinese government efforts to restrict capital outflows and shows little sign of slowing after an estimated $15 billion of overseas real estate purchases in the first half of 2016. For cities in the cross hairs, the challenge is to balance the economic benefits of Chinese demand against the risk that rising home prices spur a public backlash.
"The Chinese have managed to accumulate very large amounts of wealth, and the opportunities to deploy that capital in their own market are somewhat restricted," said Richard Barkham, the London-based chief global economist at CBRE Group Inc., the world's largest commercial property brokerage. "China has more than a billion people. Personally, I think we have just seen a trickle."
Ping An Haofang, an online real estate platform owned by China's second-largest insurer, says its $15 billion first-half estimate, derived from market data, nearly matches the figure for all of 2015.
Fang Holdings, the country's most popular property website, predicts overseas buying will increase 130 percent this year, while transactions through September at Shenzhen World Union Properties Consultancy, China's largest broker for new-home sales, already were 50 percent above last year's level.
China overtook Canada as the largest source of residential purchases in the U.S. last year after an estimated $93 billion of buying from 2010 to 2015, according to a May report by the Asia Society and Rosen Consulting Group.
It is the world's biggest-ever wave of overseas residential property investment, said Susan Wachter, a professor at the University of Pennsylvania's Wharton School who specializes in real estate markets. While Japan had a similar boom in the 1980s, it was mainly focused on commercial buildings, Wachter said.