Five Prestige MLS members are joining our team to attend LPS (Luxury Property Showcase) in Shanghai from December 6th to 8th. Before we get in touch with the local clientele, let’s study their behavior when investing in upscale real estate.
Chinese people are very down to earth. They would never buy a property just because it looks beautiful or because it has a nice view.
The Chinese upper class benefits from an increasing purchasing power. People might want to invest their money in local real estate. Many do, but more and more people are considering investing abroad. In a previous article we have detailed 3 reasons why they are investing in foreign countries.
Now that professionals from the real estate industry have identified this tremendous opportunity, the competition is rising. Thus, before going to China we want to optimize our approach.
What are wealthy Chinese people looking for?
They have a different perception of real estate. Owning a house or a condo is very important as it brings a stability that is considered necessary. In 2012, China Daily published a survey: The majority of mothers-in-law will approve their daughter’s marriage only if the proposing man owns an apartment. For them, it is a non negotiable condition. This behavior shows us the importance of real estate ownership in Chinese minds. They want to make sure that the family will be safe.
Although, when purchasing a secondary residence outside China, they are also buying a destination and a lifestyle. That is why French vineyards are grabbing more and more attention from them. It combines all what they are expecting: a sophisticated environment, a stable investment and it represents a way life. Such property represents a trophy for their career. It allows them to show their social status.
How do they select their destination?
They feel safer with locations that are already hosting a large Chinese community. For instance, places like NYC, California, Singapore, Canada and Australia host a lot of people originally from China. In Canada, mandarin is the second most spoken language. Thus, when they land in Canada for the first time, they notice all the difference with their home country, but they do not feel too uncomfortable as many fellow countrymen also live there.
How should I adapt myself to Chinese culture?
Chinese people are very down to earth. They would never buy a property just because it looks beautiful or because it has a nice view. They need stability. They want to be sure about the transaction they are doing. Give them numbers.Personal relations are important in Chinese culture. They want to know who you are. To make them trust you, introduce yourself and your agency. Tell them, who you are, what you specialize in, and where your agency is located.
They will ask you very concrete questions: How much is it? How much can I rent it out? How can I finance it? Can I easily get a visa to go to this country? Can my son make his studies in this city?
Besides, they can be very quick at taking a decision. You might be surprised to see them buying the property right away.
Now that you have learned some tips, let’s meet at LPS Shanghai in December. See you there!
