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CAIXINMEDIA

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."

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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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Society

What's Spoiling The Kids: The Big Tech v. Bad Parenting Debate

Without an extended family network, modern parents have sought to raise happy kids in a "hostile" world. It's a tall order, when youngsters absorb the fears (and devices) around them like a sponge.

Image of a kid wearing a blue striped sweater, using an ipad.

Children exposed to technology at a very young age are prominent today.

Julián de Zubiría Samper

-Analysis-

BOGOTÁ — A 2021 report from the United States (the Youth Risk Behavior Survey) found that 42% of the country's high-school students persistently felt sad and 22% had thought about suicide. In other words, almost half of the country's young people are living in despair and a fifth of them have thought about killing themselves.

Such chilling figures are unprecedented in history. Many have suggested that this might be the result of the COVID-19 pandemic, but sadly, we can see depression has deeper causes, and the pandemic merely illustrated its complexity.

I have written before on possible links between severe depression and the time young people spend on social media. But this is just one aspect of the problem. Today, young people suffer frequent and intense emotional crises, and not just for all the hours spent staring at a screen. Another, possibly more important cause may lie in changes to the family composition and authority patterns at home.

Firstly: Families today have fewer members, who communicate less among themselves.

Young people marry at a later age, have fewer children and many opt for personal projects and pets instead of having children. Families are more diverse and flexible. In many countries, the number of children per woman is close to or less than one (Singapore, Taiwan, South Korea, Hong Kong among others).

In Colombia, women have on average 1.9 children, compared to 7.6 in 1970. Worldwide, women aged 15 to 49 years have on average 2.4 children, or half the average figure for 1970. The changes are much more pronounced in cities and among middle and upper-income groups.

Of further concern today is the decline in communication time at home, notably between parents and children. This is difficult to quantify, but reasons may include fewer household members, pervasive use of screens, mothers going to work, microwave ovens that have eliminated family cooking and meals and, thanks to new technologies, an increase in time spent on work, even at home. Our society is addicted to work and devotes little time to minors.

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