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Chinese Super-Rich Storm Los Angeles Real Estate Market

Up for grabs
Up for grabs
Li Huiling

In the past year, the greater Los Angeles area has seen a surge in the number of Chinese buyers interested in the area's real estate — in particular, those mega-properties valued above the $15 million mark.

The trend has been confirmed by both L.A."s high-end real estate brokerage firm, John Aaroe Group, which has recently teamed up with Juwai, China's largest online international property search engine and information platform.

"Compared with the same period last year, we have seen our high-end property consultations, in the four quarters of 2015, go up 45%," Aaron Kirman, John Aaroe Group's overseas real estate chairman, told Caixin. "I've currently got a dozen deals in the works between $15 to 135 million. And there have been detailed inquiries on all of them by potential Chinese buyers."

Simon Henry, co-founder of Juwai, noted that as the Chinese economy slows, many of the country's super-rich are reconfiguring their assets and diversifying their investments internationally.

Mega mansions

Aaron Kirman says Chinese clients are particularly focused on mega villas above the $10-million-range. The former home of Danny Thomas, for example, is priced at $135 million, because of its capability to increase in value and because of its views.

"Not only do they like Los Angeles' property and lifestyle, but also the investment's long-term security," Kirman said. "Whether it's an apartment or an individual family home, what these buyers want is privacy, a view, supporting facilities, and architectural beauty."

[rebelmouse-image 27089867 alt="""" original_size="745x4" expand=1]

3D rendering of a hotel and residential project at 9900 Wilshire Boulevard, Beverly Hills — Source: Wanda Group

Seeing the market potential, Kirman signed a deal with Juwai to propose Beverly Hills mansions in Chinese language so the wealthy buyers can browse online at ease.

According to a report released in October by Credit Suisse, China ranks second in the number of people with a personal net worth of over $50 million, just behind the United States.

An eye for real estate

Los Angeles attracts not just individual Chinese buyers, but also large Chinese real estate developers. Wanda, China's largest real estate developer group, launched a hotel and residential project at 9900 Wilshire Boulevard, Beverly Hills, investing some $1.2 billion. Greenland, another Chinese developer, also launched a project targeted at Chinese buyers with smaller budgets of between $1.5 to $2 million. As Juwai's survey of $5 million dollar properties showed, California is the top destination for wealthy Chinese people.

However, according to the Juwai, though mainland Chinese buy most of America's luxurious homes, the most liberal with their money remains the Chinese language speakers who are either American citizens or long-time residents.

A survey conducted by the Association of Realtors (NAR) showed that, over the past year, Chinese buyers are the U.S. market's largest group of foreign buyers; while Juwai's data showed that Chinese buyers' overseas property investment has soared from $5 billion in 2010 to $52 billion in 2014, and is predicted to rise to $220 billion by 2020.

Even with the much talked about slowing down of the Chinese economy, Forbes reports that the number of Chinese people with a $31.5 million net worth went up by 57% in 2015.

An industry insider in China said the Chinese government is considering officially lifting the restriction on the export of capital in the next five years. What it means is that the colossal amount of capital bound domestically will be liberated and turned into overseas investment. We can only imagine what that could do to the value of mansions in Beverly Hills.

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Look At This Crap! The "Enshittification" Theory Of Why The Internet Is Broken

The term was coined by journalist Cory Doctorow to explain the fatal drift of major Internet platforms: if they were ever useful and user-friendly, they will inevitably end up being odious.

A photo of hands holding onto a smartphone

A person holding their smartphone

Gilles Lambert/ZUMA
Manuel Ligero


The universe tends toward chaos. Ultimately, everything degenerates. These immutable laws are even more true of the Internet.

In the case of media platforms, everything you once thought was a good service will, sooner or later, disgust you. This trend has been given a name: enshittification. The term was coined by Canadian blogger and journalist Cory Doctorow to explain the inevitable drift of technological giants toward... well.

The explanation is in line with the most basic tenets of Marxism. All digital companies have investors (essentially the bourgeoisie, people who don't perform any work and take the lion's share of the profits), and these investors want to see the percentage of their gains grow year after year. This pushes companies to make decisions that affect the service they provide to their customers. Although they don't do it unwillingly, quite the opposite.

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Annoying customers is just another part of the business plan. Look at Netflix, for example. The streaming giant has long been riddling how to monetize shared Netflix accounts. Option 1: adding a premium option to its regular price. Next, it asked for verification through text messages. After that, it considered raising the total subscription price. It also mulled adding advertising to the mix, and so on. These endless maneuvers irritated its audience, even as the company has been unable to decide which way it wants to go. So, slowly but surely, we see it drifting toward enshittification.

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