Wednesday, February 1, 2017
Many of China’s Elderly are looking to Retire and Invest Abroad
China is facing a looming demographic crisis due to its rapidly aging society according to a UN Study. There soon will be an estimated 360 million Chinese over the age of 60 in 2030. That is 25% of the population, which is also larger than the entire US population. China may not have the resources to care for a large retired population. Their economy has slowed, and affluent Chinese are increasingly investing in retirement properties overseas both for their parents and their own golden years. They have benefited from a property boom at home and they would like to retire somewhere safe, environmentally clean, safe and comfortable. The yuan’s value has decline against the dollar, so they have been pouring money into foreign investment in Europe and the US. Overall Chinese investment in foreign commercial and residential real estate jumped from $5.6 billion in 2012 to $34.4 billion last year, according to recent studies. A recent survey also indicated Chinese who had either emigrated or were considering emigrating, of those 60% said they would buy an overseas property in the next three years, with the US, UK, Canada and Australia as the top destinations. More than half indicated they were concerned about the continuing depreciation of the yuan. Outbound tourism has shot up 200% in 2015 from 2014. Retirees expect to live full lives in their golden years and the west appears to be their desire destination. Chinese also like living with people of their own culture just like others. California has one of the largest Chinese populations in the US. Many also look to vacant land as an investment vehicle, since there is no maintenance on land parcels. They can sell the property later for a profit and then buy a home in California. The investment becomes a safe haven from the yuan and home government. Also what make Antelope Valley a good prospect is the new medical facilities. Retirees like access to safe state of the art medical care. The desert valley may fit the bill. Also China has dense cities with crowded apartments. Antelope Valley and many parts of California are the opposite of that. Additionally, a foreign investment benefits their children and grandchildren. In China property ownership is a leasehold and not fee simple like the US. A leasehold maybe only 70 years in China, so you can’t will the estate to your children which is so common in the US. There are still cultural barriers to Chinese foreign investment, but some of the positives may outweigh the negatives. An investment can be turned into cash when appropriate.