Readers of this June issue of PERE will notice how there is a bias towards coverage of wealthy individuals and their activities. Within these pages, you can find various reports, highlighting the reasons why the wealthy are so in love with the real estate asset class and how they are investing.
Explanations range from liking something that can be seen and felt, and enjoying the yield, to diversification, wealth preservation, status, and non-correlation to other asset classes such as equities. However, when it comes to wealthy Chinese entrepreneurs, perhaps everyone has missed the point.
For PERE has unearthed an article from September 2012 written by freelance journalist Roseann Lake who has just returned from China after five years in the country.
In an article entitled ‘Bachelor Padding’ she has come up with a novel yet potentially correct analysis that makes a connection between lonely single men and the overseas outpouring of investment and even the creation of a dangerous real estate bubble.
Within the article, there is plenty of data to back an argument up that China’s one-child policy left men with a very competitive field when it comes to girls. After all, there is said to be a gaping gender imbalance of 120 boys for every 100 girls.
It is also said that by 2020, 15 percent or one-in-six men of marriageable age will be unable to find a bride, something that is already occurring in Taiwan and South Korea – two other countries where overseas property investment is on the agenda. Mathematically, many men cannot get married and will be consigned to the singleton scrapheap. And here is the real problem: the mothers of potential brides are forbidding their daughters from marrying any man who is not a homeowner.
This in turn is pushing property prices up, helping those that have made investments in the first place to become very rich and eventually to buy real estate overseas.
So you see, the global trend of Asian high net worths and family offices competing against institutions for prime property assets in Europe and the US has nothing to do with the reasons highlighted elsewhere in these pages and all to do with the battle for brides.