Chinese Government Regulations Could Impact Bay Area Housing Market
China’s government restrictions on foreign investments could lead to fewer Chinese homebuyers purchasing homes in the Bay Area. The Chinese government is now limiting foreign exchanges to $10,000 a day, on top of the existing annual $50,000 cap for transfers.
This change could have a significant impact on real estate in the Silicon Valley, where housing is in high demand with low availability. According to a report by Bisnow, 86 percent of Chinese homebuyers in the Silicon Valley were making all-cash purchases — compared to just 32 percent of other foreign buyers making all-cash purchases.
Chinese homebuyers make up half of the foreign homebuyers in California, but that number is decreasing, as is the overall number of foreign homebuyers in the state. In 2014, foreign buyers made up six percent of all home purchases in California, but in 2016, that number dropped to just three percent.
Fewer Chinese home buyers eyeing homes in the Bay Area could mean less demand and more availability for other interested buyers.