China’s Bitcoin nouveau riche are taking their profits overseas in search of the perfect real estate opportunity, according to Coindesk.
It appears that California and the UK, notably London, are on top of successful Chinese entrepreneurs’ hit list of favorite locations for an investment in property or second residence. This choice is reported to be motivated by innovative fintech activity in these areas. Other popular locations are Hong Kong and Dubai.
Hong Kong is attractive due to its flexibility regarding taxes and documentation, compared to some other overseas countries according to the South China Morning Post, and the amount of real estate purchased in the territory by Chinese investors has been on the increase for a number of years.
The latest group of property purchasers appears to include increasing numbers of early Bitcoin adopters. In California, a startup which connects estate agents to buyers has seen that Chinese interest is particularly strong in cities such as Los Angeles, San Francisco, and New York.
CEO Roy Dekel claims that such Chinese Bitcoin entrepreneurs often convert their money into cash before investing in real estate rather than attempt direct Bitcoin purchases, observing that the ultra-wealthy Chinese have used this source as a diversification of investment. He did indicate that there was another group of what he called “blockchain enthusiasts” who are attracting sellers who are happy to take direct crypto payments from international home buyers.
One such Bitcoin early adopter is ex-beef salesman Guo Honcai, who sold 500 Bitcoin earlier this year and spent the funds on a mansion in Los Gatos, a 90-minute drive from San Francisco, California, with plenty of space for his Bitcoin purchased Rolls to sit in the driveway.
“It’s very normal to sell Bitcoin in the U.S. After selling Bitcoin, you can just buy anything you want,” Guo explained.
Buyers such as Guo not paying directly in digital currency usually avoid banks in order to obtain their foreign currencies. However, Natalia Karayaneva, CEO of crypto real estate platform Propy, suggests that the numbers of those paying directly with crypto are increasing, and include purchases across the whole spectrum of real estate:
“The requests we have from them start at $50,000 or $100,000 up … the latest one was $3 to $4 million for Silicon Valley,” adding:
“We’re seeing that more and more people are willing to buy properties with cryptocurrencies because it’s getting easier to get their money out of the country using bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels.”
The New York Times recently reported that the Chinese housing market has tightened and is now “like a casino” with exorbitant prices. Karayaneva agreed that the Chinese market was now moving overseas as “…their own property market is going crazy.”
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