China is dialing back its years-long real estate buying binge and has now reversed course to become a more significant net seller, according to a Wall Street Journal report.
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Chinese real estate investors usually bid high prices for lavish places, including the Waldorf Astoria Hotel in New York City.
Real estate agent Dolly Lenz, the founder of Dolly Lenz Real Estate, told FOX Business’ Maria Bartiromo on Wednesday that Chinese real estate investors who are buying properties for high prices are causing a pause in the real estate business.
“The commercial market is tough, it’s been slowing down. Prices got way too high way too fast, partly because of Chinese purchasers,” Lenz said. “All of the sellers are expecting this new high.”
According to a report by Real Capital Analytics, during the second quarter of 2018, Chinese investors sold $1.29 billion worth of property, but only purchased $126.2 million.
Lenz predicted that this trend will only be short term.
“So there’s these usual short term blips,” she said, “but then somebody will scoop up that property that they’ll sell cheap, and they’ll benefit from it.”
Lenz added that individuals are doing the same thing, where they see someone buy a property for a cheaper price, flip it, and then expect the property to sell for a higher price.
“They’re not going to get it,” she said, “We can track lots of people who have suffered losses in the last year of something they bought a year ago.”