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Hawaii's new foreign real estate buyers
Brief:Wealthy Koreans and Chinese from three locations join Japanese and Canadian buyers in the Hawaii's real estate market.
Honolulu is one of the top 10 real estate markets in the country for international buyers.

According to the National Association of Realtors (NAR), Japan-based buyers still account for more than 58 percent of all international sales in Hawaii. Canadians are also an important market, but they make up just over 16 percent of foreign buyers. The next largest group is the fabled Chinese, comprising nearly 6 percent of all international sales.

It’s the group from mainland China that has some Realtors on the edge of their seats. After all, the country’s booming economy has produced hundreds of thousands of new millionaires, and, a popular Chinese real estate portal, as many as 85 percent of them would like to immigrate to the U.S. or send their children to school here. That’s why smart Realtors like Choi see so much potential in the China market. Although Choi says that 60 percent to 70 percent of her business last year was from Japan, she’s focusing more and more attention on China.

" I’ll be leaving on a flight to China next week,” she says. “This is my third year in a row that I’m going to China.” She’s also going to Seoul this year instead of Tokyo.

" It looks like about 3.5 percent of our members are Japan-based. We also have members from Australia, Canada, Holland, Hong Kong, Korea and Singapore; but everybody is less than 1 percent except the Japan contingent.” says Rob Kildow, principal broker and director of sales for Hualalai Realty.

Probably the most important issue for foreign buyers is the difficulty in obtaining financing. Banks simply don’t want to offer a typical mortgage to foreign nationals, which means these transactions often involve large quantities of cash. This is particularly troubling for Chinese buyers, who, because of tight currency regulations, often have difficulty getting money out of China.

One way Chinese real estate buyers are getting around visa rules and currency restrictions is by investing in U.S. businesses. According to the U.S. Citizenship and Immigration Service, over the past four years there’s been a 35 percent up-tick in EB-5 applications, a program that awards permanent resident status to foreigners who invest at least $500,000 in new U.S. business ventures that create a minimum of 10 jobs. Last year, 78 percent of all applicants for the program were Chinese nationals.
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