Foreign buyers reshape global real estate markets

According to a recent report by the National Association of Realtors in the U.S., foreign nationals purchased $56 billion worth of U.S. homes from April of last year through March of this year. Chinese buyers accounted for 24.5 percent of that total, or $13.7 billion, meaning one in every four foreign-bought homes in the United States is now owned by a Chinese national. In California, the state with both the largest population and economy, Chinese buyers made up 36 percent of all foreign residential property purchases.

On July 8, Agriculture Secretary Brooke Rollins, Defense Secretary Pete Hegseth, and Attorney General Pam Bondi held a joint press conference in Washington. They announced plans to ban farmland purchases by foreign adversaries, including China. According to the Department of Agriculture, Chinese entities now own approximately 1,214 square kilometers of American farmland—roughly the size of Los Angeles.

Chinese capital is also flowing into prime real estate in major Japanese cities, including Tokyo, Osaka, and Kyoto. In May, Mitsubishi UFJ reported that foreign nationals accounted for 20 to 40 percent of new apartment purchases in central Tokyo, with most believed to be Chinese. The South China Morning Post reported that from July 2023 through June 2024, Chinese nationals were the top foreign buyers of residential properties in Australia.

It is widely known that Chinese capital is buying large amounts of housing, buildings, and land in key countries, sparking growing resentment among local residents. This has led many nations to introduce new policies restricting foreign real estate purchases.

Canada, which imposed a two-year ban on home purchases by non-resident foreigners beginning in January 2023, has extended the restriction until January 2027. Australia permits non-resident foreigners to buy only newly built properties, not existing ones. Countries such as Australia and Singapore levy higher taxes on foreign buyers than on local residents. Some U.S. states, including Florida, have introduced their own restrictions on foreign real estate purchases, independent of federal rules.

In Japan, where foreigners are allowed to buy property on equal terms with locals as part of a strategy to revive the stagnant economy, public opposition has started to influence election results. In the June 20 upper house election, the emerging party Sanseitō, which made restricting foreign property purchases a central campaign issue, increased its seats from two to 15 over three years.

In democracies with market economies, excessive discrimination against foreigners is problematic. However, under the principle of reciprocity, Chinese buyers enjoy far greater benefits when purchasing property abroad than foreign nationals do in China. In China, only the state can own land, while individuals have temporary rights to buildings.

According to the Bank of Korea, the total market value of residential properties in South Korea was 7,158 trillion won at the end of last year, about 2.8 times the country’s nominal GDP of 2,557 trillion won. Given this, South Korea’s real estate policy, which focuses mainly on curbing tax evasion by foreign buyers rather than regulating property purchases, still has a long way to go.