We’re seeing that more and more people are willing to buy properties with cryptocurrencies because it’s getting easier to get their money out of the country using bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels CEO, Propy
Propy is a real estate portal worldwide with decentralized title registry, where they allow buyers, sellers, brokers, and agents/notaries to come together through the utilization of a suite of smart contracts on blockchain to facilitate transactions. Transactions can be made in fiat currency or cryptocurrency. Propy is the world’s first real estate portal where you can buy or sell your property using digital currency. Many Chinese investors are selling their cryptocurrency and are buying real estate in the USA, or the United Kingdom or other European countries. Chinese who bought their Bitcoin (BTC) and other cryptocurrencies at a very initial stage, have seen their holdings increase in value over the years to astronomical levels. Similarly, others are choosing to further diversify their crypto holdings into the global real estate industry.
Guo Hongcai, a Chinese investor
This is the story of a Chinese investor Guo Hongcai, a beef salesman who invested very little amount in Bitcoin at very initial stage and turned himself in early bitcoin adopter from China’s Shanxi province. He is one of many freshly minted millionaires funneling parts of their wealth out of the country by purchasing real estate abroad. In April, Hongcai sold his 500 bitcoin in the U.S. market then used that money to buy a 100,000-square-foot mansion in Los Gatos, a 90-minute drive from San Francisco, California. He also owns a Rolls-Royce that is parked at the property and it is also part of his purchases from the BTC sale.
It’s very normal to sell bitcoin in the U.S. After selling bitcoin, you can just buy anything you want.
Strict regulations in China
Due to the strict laws and restrictions from the government on buying real estate in china Mainland, crypto millionaires are moving to foreign real estate markets to diversify their holdings. Some purchase property directly with crypto, others like Hongcai, use bitcoin to gain foreign currencies without going through a bank. As per South China Morning Post, real estate purchased in Hong Kong doesn’t require the same taxes and documentation as other financial assets held abroad. Chinese investment in foreign real estate, often through Hong Kong brokers, has been rising for years. Now early bitcoin adopters are utilizing new wealth for familiar patterns.
Favorable foreign market for Chinese investor
Natalia Karayaneva is the CEO of Propy and she says the U.S. and the U.K. are the most favorable locations for Chinese real estate investor, especially fintech hubs like London, Birmingham, Chicago, New York and California’s Bay Area.
They were mostly interested in residential properties next to good education, like Stanford, Also, they want to diversify. They want to have parts of their assets abroad in more stable countries.
So far, around half of the traffic to Propy’s website comes from China, out of 50,000 monthly views. It’s a trend that has implications far beyond China, though, especially in California, where, according to statistics gathered over a decade by ATTOM Data Solutions, nearly a quarter of all single-family homes are now purchased in all-cash transactions without a mortgage.
Mortgage less, cash buying
There are many other real estate agents in the United States have claimed that the Chinese are investing in real estate in the U.S. because of their legal obligations to buy property in China. And they are using Bitcoin to buy their properties in the U.S.These individuals have decided that this decentralized digital currency is an asset to store and transact their wealth. The millions of Chinese who believe in Bitcoin’s value should be afforded the same access and protections as other asset investors. It’s more common for Chinese bitcoin veterans to convert cryptocurrency into cash than to buy property directly with it.
We have noticed a drop in Chinese interest, but certain cities like Los Angeles, San Francisco, and New York remain strong. The ultra-wealthy Chinese have used this source as a diversification of investment.
Since platforms like Propy are compliant across jurisdictions, the reason behind this trend may go beyond tax evasion, speaking to real pain points in legitimate markets. In January, The New York Times asserted that China’s exorbitant housing market is “like a casino.” Further, it was reported that property development restrictions will continue to tighten, such as reduced subsidies for housing developers.
All things considered, Chinese buyers are hardly the only ones purchasing property with cryptocurrency. In 2017, Europeans used bitcoin to buy luxury apartments in Dubai’s Aston Crypto Plaza, a project spearheaded by British Baroness Michelle Mone. Wherever it’s taking place, though, it has become increasingly clear that crypto wealth could have a real impact on global real estate patterns.