Could you think New Cooperation with China Affect Florida Real Estate?
On April 6th and 7th, President Donald Trump met with Chinese President Xi Jinping. During the historic meeting, Trump and Jinping discussed trade and relationships between the two countries. National press reported that Trump raised his concerns about trade practices in China, and discussed the escalating tension in the Middle East and on the Korean peninsula.
In the meeting that took place at the Palm Beach Mar-a-Lago resort, no major deals technically went through, but real estate experts have high hopes for the long-term results of the talks.
Jinping said, in a statement to the Foreign Ministry of China website, that the two countries must promote a “healthy development of bilateral trade and investment…We have a thousand reasons to get China-U.S. relations right, and not one reason to spoil the China-U.S. relationship.”
Before the meeting took place, real estate experts across Florida expressed their desire for positive relations between the two countries. A report from The Real Deal showed that partners in real estate firms across South Florida were hoping that good relations could mean better real estate opportunities overseas.
One real estate professional told The Real Deal that “it is in our economic interest that there not be any breakdown in trading and doing business with China…You would hope that a strong trading alliance, no restrictions on travel and limited currency controls on China’s part come out of these talks.”
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Chinese investment in real estate is surprisingly large in the United States, though nowhere near as substantial in Florida as it is in Los Angeles and New York. Interestingly, however, investment in Florida real estate by Chinese companies and individuals has been increasing quite steadily over the last couple of years. A 2016 report from commercial brokerage CBRE showed that more than half a billion U.S. dollars of Chinese cash had entered Florida in just the first six months of 2016.
This investment represented roughly 52% of all real estate investment in the area, showing signs of a shift in the commercial real estate market in Florida. Roughly 43% of Chinese investments in Florida were on office buildings, with around 33% of investments being focused on hotels.
Investors throughout Asia have also been buying up properties and even partnering with local American developers to build brand new commercial and residential properties.
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Talks between China and America appear largely positive so far, though overshadowed by talks of military intervention in North Korea. China is reportedly threatening to stop exporting oil to North Korea if the country doesn’t cease its nuclear weapons testing, which comes after Trump stressed the importance of cooperation over the Korean conflict.
When it comes to real action on trade, however, many real estate professionals throughout Florida are relying on continued cooperation between the countries in order to allow more foreign investment in the region. This means that more properties can be built and sold, contributing to the Floridian economy.
However, for the average home buyer, it’s unclear how new relationships (or indeed, continued relationships) with China could affect the promise of a sale. The current demand for properties in the United States is surprisingly high, while supply is low. Continued investment from China could potentially see new homes hitting the market, though with such a heavy investment in commercial properties like offices and hotels, this is only mere speculation at this point.
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