At properties held by Chinese investors globally, people see more and more for sale signs. Chinese investors are in dire need of getting their money back in the context of the real estate crisis in mainland China getting worse and worse.
When Chinese investors need to collect money to solve domestic problems, selling real estate is inevitable – Photo: Bloomberg
The global real estate crisis, directly caused by interest rate hikes, has caused the value of office real estate to decline by more than 1 trillion USD, according to calculations by real estate companies. Starwood Capital Group. However, no one can give an exact number on how much the actual value has decreased because so few real estate properties have been sold. The total number of real estate transactions completed globally in 2023 falls to its lowest level in a decade.
Real estate market managers and members are now concerned about the possibility that the current market stagnation may be concealing much larger losses, and banks themselves will bear the brunt of the consequences. fruit. Previously during the pandemic with cheap money flooding in, they lent too much money to the commercial real estate sector.
Last week, an important development happened in the US banking industry. On Tuesday, New York Community Bancorp shares fell to their lowest level in 27 years. Previously, this bank was forced to announce a dividend cut and reduce stock purchases because of problems with real estate credit.
On the other side of the continent, the European Central Bank (ECB) is also currently very worried by issues related to commercial real estate in this continent. In the UK, the British Financial Conduct Authority (FCA) is also forced to review the valuation of real estate assets of real estate businesses.
Now, assets that were snapped up by the Chinese during more than a decade of expanding global investment are being put on the market by their owners, who have decided they need cash to compensate for the loss. damage to China’s domestic real estate market, even though in doing so they will likely face many financial losses.
Office buildings that are too empty are no longer a new thing in major American cities – Photo: GettyImages
Beijing’s strategy to limit excessive lending has generally affected all real estate businesses, including large real estate businesses. A branch of Guangzhou-based Aoyuan real estate group was forced to sell a property in Toronto – Canada at a price reduced by up to 45% compared to the 2021 price, according to data from the data provider. Altus material.
However, there are also opinions that the current adjustment of the global real estate market has its own positive side. Credit analyst at Bloomberg’s economic analysis department, Mr. Tolu Alamutu, analyzed: “For those who really want to sell, the freezing situation in the housing market will be broken. Dinh Real estate prices will likely fall further.”
Outside Europe, in many other countries such as Australia, many properties of Chinese investors are also being sold. Just a few years ago, many ambitious Chinese real estate businesses were the main “players” in the market. Now, the majority of these have stopped buying real estate and instead gradually sold their holdings.
Some notable recent deals include the Risland area of Chinese group Country Garden in the suburbs of Melbourne, which was sold for 250 million Australian dollars, equivalent to about 163 million USD. At the same time, Country Garden Group also recently divested capital from a large real estate project in Australia.
Certainly, during the period of explosive global real estate growth, Chinese investors are not alone in driving up real estate prices. Korean investors also poured a lot of money into office real estate. High interest rates also forced them to sell some real estate in Germany and some Northern European countries at cheap prices.
In the near future, the maturity of many loans in the real estate sector in the US will also create a wave of strong real estate sales by many US regional banks. But perhaps the group of Chinese investors will have the greatest motivation to sell assets.