Where Chinese tourists go, Chinese investors follow
Night time in Seoul. Image credit: jareed (Flickr)
First, it was Jeju Island, now Chinese investors are zoning in on Seoul.
Investors from China scooped up 3,516 plots of land in the South Korean capital in the first quarter of 2016, a two-fold increase from figures in 2013, new data from the Seoul Metropolitan Government (SMG) show, as reported by The Korea Times.
Many Chinese investors target properties that show business potential or those in locales that have seen plenty of tourist activity. In the first half of this year, Chinese nationals accounted for 22 real estate transactions in Mapo District, a popular tourist spot.
The trend of investing in Seoul properties marks a departure for Chinese investors, who have traditionally targeted real estate in Jeju Island, another tourist favourite.
“The Chinese government had encouraged overseas investment due to a real estate bubble. They first eyed Jeju where they can get permanent residency, but now they are turning their eyes to Seoul seeking investment returns,” Ko Jong-wan, president of the Korea Asset Management Institute, explained to The Korea Times.
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Chinese visitors to South Korea numbered 1.07 million in the first two months of the year alone. The country expects a record total of 8 million Chinese tourists by the end of the year.
Chinese investors are displaying their purchasing power in residential real estate as well. SMG reported that two Seoul homes, each covering 244.5 square metres, recently sold to a Chinese investor for KRW3.2 billion (USD2.8 million) apiece.
Such willingness to infuse Seoul with vast amounts of foreign capital has sounded an alarm to some experts. If trends continue, the market could follow a precedent set by Vancouver, a market grappling with a housing affordability crisis due to an influx of Asian cash.
Property investment outflow from China hit USD34.6 billion in 2015, Juwai reported.
Read next: Has China put itself at risk of a real estate bubble?
Source : property-report.com
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