If you thought the Real Estate Market was complicated and frought with dangers, a new development should send everyone back to the board.
China's economic advisers are eyeing the US market as a source of investment, to move away from the massive bond stake they are holding. And they plan to diversify Chinese style: massively.
The proposed figure is 3.4 trillion dollars. It would be part of a foreign-exchange reserve in the US properties.
As the US real estate market is poised for a recovery, the Chinese have started to consider such investment to diversity their portfolio, and move away from just holding bonds, or government debt.
The reason of course, is a more secure investment. In fact China has already set up shop in New York to oversee such investments. The market in fact is rebounding on its own. 133 out of 150 metro areas shows double digit increase in price. Some people however, are already warning of a second real estate bubble.
Mostly the Chinese are looking to buy office buildings, which have fairly stable yields.
China, furthermore, is already diversifying in real estate holdings in other countries. It purchased Winchester house, in London, among other properties.
Source : Bloomberg 5.27.13
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