The US authorities have this week announced plans to revise the visa system for Chinese students moving to the country. Previously Chinese students studying in America were forced to renew their visa annually which stopped many of them from making long-term plans for their future in the US. However, President Obama has announced that the previous annual renewal of student visas will be replaced by a five-year visa.
It was also announced that tourist and business visas have been extended to 10 years which again gives Chinese visitors the opportunity to plan further ahead and ultimately invest more in the US real estate market.
California and New York City real estate
It is common knowledge that there are large Chinese speaking communities in the California and New York City regions with a number of high quality education facilities. These are likely to be two of the main regions which will benefit from the extended student visa system allowing executives to acquire real estate in the US while sending their children for further education overseas. Indeed, the extension of both tourist and business visas will also allow Chinese executives to bring their children with them for education purposes with minimal fuss.
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At this moment in time the US government believes that the 1.8 million Chinese visitors per annum generate around $21.1 billion for the US economy. This is expected to increase to around 7.3 million Chinese visitors by 2021 leading to an additional economic input of $85 billion per year. We can only imagine how much of this will be spent on high end real estate across the US.
Improving investor relations
The relationship between the US government and its Chinese counterpart has been very volatile to say the least over the last few decades. There has been significant movement in recent times and the relaxation of the visa system has been well received by the Chinese authorities, Chinese students and business executives alike. When you bear in mind the enormous real estate investment from Chinese sources occurring today we can only estimate how these changes will increase that dramatically.
There have been concerns expressed that Chinese investors are playing a larger role in the US real estate market than many are comfortable with. The fact remains that in this modern and free world we live in, real estate markets are now open to worldwide investors and after a period of significant growth in Chinese real estate prices, many Chinese investors are now looking overseas. It is unlikely that the US government would be able to put in place barriers or restrictions without jeopardising the free-market economy on which the US is based.
At a time when Chinese investors are influencing more and more real estate markets around the world, it was interesting to see that the US government lifted various restrictions on student, business and tourist visas. This will have a significant impact upon the US economy going forward and perhaps more importantly will create yet more demand for high-end US real estate. The political relationship between China and the US has been volatile to say the least but this week’s announcement seems to suggest a more positive attitude from all parties.