Amid new capital controls out of Beijing, Chinese investors are now pulling back and that pullback is now affecting the flow of cash coming to New York’s real estate market among other U.S. cities and industries. Starting the end of last year and continuing into early 2017, Chinese regulators have rolled out a series of capital controls to help stabilize the country’s weakening currency and promote investment within China. Those restrictions have lowered the ceiling on how much money Chinese individuals and corporations can invest abroad.
In 2016, New York’s real estate saw $14.3 billion in Chinese investment, according to a JLL Global Capital Flows report. And while investments won’t completely go away, the pace of growth is projected to slow down. Chinese investors are expected to deploy $58 billion into U.S. real estate between 2016 and 2020, a more than 50 percent drop from the $110 billion invested in the slightly longer six-year period spanning 2010 and 2015, the Asia Society reported last year. Arthur Margon, one of the report’s authors and a partner at Rosen Consulting Group, which specializes in real estate economics, predicted an 18- to 24-month investing “hiatus” from Chinese investors due to capital controls.