With Wall Street having bid real estate prices to the moon in the US (and become Spain’s biggest slumlord), and handed them happily over to willing Chinese ‘get-my-money-out-of-China’ buyer greater-fools, it would appear the Chinese (having colonized America) have found a new more attractive place to park their excess liquidity. As Bloomberg reports, at a property auction in Lisbon, Portugal last month, about 90% of the bidders for the government-owned apartments and stores on offer were Chinese. They ended up acquiring more than two-thirds of the 45 properties, with one money-launderer investor noting “Lisbon is cheap if you compare it with other cities.”
1-in-4 homes bought by foreigners in America in 2014 were by Chinese.. and Portugal is already at 1-in-5…
Portugal is the latest target for Chinese investors who have been acquiring buildings around the world as China allows freer movement of funds in and out of the country.
The Chinese accounted for almost one in five foreign property purchases in Portugal during the first nine months, according to the Lisbon-based Portuguese Real Estate Professionals and Brokers Association. They already represent the biggest group of foreign buyers based on money invested, said Luis Lima, head of the association.
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“Lisbon is cheap if you compare it with other cities,” he said. “The economy is improving and there are some good deals to be done here.”
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For buyers from outside the European Union, there’s also the prospect of a visa. Chinese investors are the top beneficiaries of Portugal’s property-for-visa program, which enables buyers of property worth 500,000 euros or more to live in Portugal and travel freely within the EU.
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Chinese bidders may be congratulating each other on their purchases for some time to come, unless Portugal’s economic recovery starts to pick up steam. An unemployment rate of 13.9 percent and years of tax increases mean that most local investors are unable to outbid their Chinese counterparts.
“It’s obvious that the Portuguese can’t compete with the Chinese investors at these auctions because they don’t have cash available to spend,” said Nuno Durao, the head of real estate company Fine & Country, which specializes in the sale of residential luxury real estate. “Lisbon property auction rooms would be empty if it wasn’t for foreign property buyers.”
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What could possibly go wrong?
via Zero Hedge http://ift.tt/1xpLQL9 Tyler Durden