(ECNS) -- China has become the biggest overseas purchaser of global properties, an official with the China General Chamber of Commerce-USA (CGCC) said on Tuesday in New York.
Xu Chen, chairman of CGCC and also president and CEO of Bank of China USA, told China News Service that local property developers, encouraged by current opportunities, are expanding overseas and have increased investments in both commercial and residential real estate.
According to research agency Real Capital Analytics, Chinese investors bought properties abroad worth $13.6 billion in 2014, compared with $15.3 billion in 2013 and $5.4 billion in 2012.
In particular, an increasing number of Chinese insurance companies are investing in overseas property as regulators have eased restrictions on such transactions.
In 2014, China's insurance regulators raised the upper limit on property assets held by an insurance company to 30 percent, from the previous 15 percent the government had set in 2012.
Chinese insurers are now the major buyers in European and American real estate markets, Xu said during a financial and property market forum held in New York.
According to the latest statistics, Chinese insurance company assets totaled 10.55 trillion yuan ($1.7 trillion) as of the end of February 2015, while Chinese-funded insurers have bought overseas properties worth $2.5 billion so far this year, exceeding total spending by that point in previous years.
Two of China's largest insurance companies, China Life Insurance and Ping An Insurance, will buy the majority of equities in a $500 million Boston project, their first investment in commercial property in the United States, the Wall Street Journal reported earlier this month.
Analysts attribute the overseas property-buying spree to the relatively lower risks in European and American markets, which are mature and give predictable returns, as well as the fall in property prices in some regions due to the financial crisis. By contrast, land and property prices in Chinese cities have skyrocketed in recent years, which in turn have eaten into property developer profits. Large Chinese property developers which try to avoid putting all their eggs into one basket are also tapping the overseas market.
In addition, some of China's nouveaux riche, who are considering an overseas education for their children or even migration, also invest in properties abroad.