(Ecns.cn)--Due to Chinese authorities' control policies on housing prices and the restrictions on the number of homes a family can buy in key Chinese cities, more and more of China's rich have begun to look at the real estate market beyond the nation, especially now that the land and houses in the United States are at a lower price, China Business Times reported.
Chinese netizen buys US land with $8,800
A Chinese netizen in Shanghai has won a 1,000-square-meter (0.25 acre) parcel of land in the United States with $8,800 through an Internet auction this July, the report said.
The 31-year-old office worker, surnamed Ye, must also pay $4,878 in taxes for the land located in Miami, Florida. The deal will only cost her 57.2 yuan ($9) for each square meter.
The activity was sponsored by SouFun's International Managing Director Zhuang Nuo, who has worked to help US developers sell land in China.
Ray Piel, general manager of United Solutions of America LLC, a company engaged in non-performing asset deals, turned to Zhuang this June and asked him to find Chinese developers to invest in 600,000 square meters of land in the US.
After contacting several property developers in China, Zhuang failed to find a proper one, as some of they were facing capital shortages and some were worried about their lack of development experience in an overseas market.
Zhuang figured out a new approach for promoting the land – sell it to an individual. His idea was agreed on by United Solutions of America LLC. The land which was auctioned on the Internet was a trial run.
The online action started on June 16. About 1,200 buyers took part, 71 of whom offered $8,800 by July 5, which was the ceiling price for the auction, on the last day of bidding. Ye was one of them. On July 12, her name was selected through a lottery.
"It is really a good deal," said one of the online bidders."$8,000 is about 57,000 yuan. In Shanghai, you cannot buy 1 square meter of certain high-ended buildings with that money. But you get 1,000 sq meters of land in the US and can get a permanent residence permit," he added.
Ye plans to hold her land as an investment. "It is an advisable choice," said Zhuang. "The land was worth $90,000-$100,000 in 2009."
With more Chinese rich taking part in these auctions, prices of US land could not be capped at $8,800 anymore, said Zhuang. The final price for a group purchase was settled at $19,988 per square meter.
In China, the buyer can only own land-use rights, but in the US the land would be the buyer's private property and can be freely traded in the market, said Zhuang, while analyzing the reason why so many rich Chinese are keen on buying land in the US.
In addition, it is a good time for Chinese to buy land or properties in the US as the price is at low level, said Mo Tianquan, president of SouFun. Besides investments, more rich Chinese are buying houses in the US to live in. They plan to attain residency in the US for their children in the future, even though some of these kids are still in kindergarten, said Mo.
For investment purposes, Zhuang proposed that Chinese people should buy land or carports instead of houses in the US, as the price of land and carports are lower and have a lot of appreciation space.
