Investing in Texas
Texas is the 2nd biggest US state, and for China’s overseas homebuyers it holds some of the biggest opportunities. The greater Houston and Dallas areas in particular are good for both living, and they are also good for investment with low home prices that are expected to rise considerably over the long-term. Chinese interested in US property know this, and that’s why many are buying Houston and Dallas area homes.
Formula for Healthy Returns
As of late 2015, the average sales price of a home in the Houston or Dallas metro areas is less than one-third the average price of a home in New York or San Francisco. The two Texas metros are also more affordable overall, their costs of living averaging about 30% lower than cost of living in San Francisco, New York or Boston*.
*Council for Community and Economic Research (C2ER), Cost of Living Index
It’s not just the low home prices that attracts property investors to the two cities however, but rather their combination of low-priced homes and strong market demand – demand created by very robust economic growth. According to a Forbes magazine index that takes into account both population and economic expansion, Houston and Dallas were respectively the 1st and 3rd fastest growing cities in the US during 2015. In fact the two cities have been ranked among the fastest growing metro areas for several years.
Although economic growth is cyclical by nature, there is good reason to believe that the growth of Houston and Dallas will persist for many years, even decades. One reason is the economic resilience exhibited by both cities when they were among the first metro areas in America to recover from the Great Recession of 2007 – 2009.
The fact that both cities have highly diversified economies that are not disproportionately affected by downturns in any single industry also brightens their long-term prospects.
An abundance of vacant land for development around both cities also brights their long-term outlooks. Construction of new homes in these undeveloped areas will help ensure that home prices grow at a reasonable rate in the two metro areas over the coming decades.
Everything's Bigger in Texas
Yet another reason why many see bright long-term prospects for Houston and Dallas properties is the big-thinking and business-friendly character of the Texas government and its people.
Each year a number of US magazines and think tanks publish lists of the most business-friendly states, and Texas consistently ranks at or near the top of each. The Texas government achieves its popularity among business leaders through policies that seek to minimize corporate taxes and regulations. Local governments also offer various incentive schemes to attract business and investment, including, in the case of Houston and Dallas, EB-5 investment-for-residency programs for foreign investors.
The big welcome that Texas extends to businesses seems consistent with the character of the state and its people, which is perhaps best encapsulated in the phrase ‘Everything’s Bigger in Texas’, a saying known to virtually every American. The adage probably first referred to the physical dimensions of the state, its infrastructure and properties, but nowadays it just as often describes the big ideas, big actions and larger-than-life personalities that Texas seems to produce in abundance. The latter include, in modern times, four of the eleven most recent US presidents, and in times past, countless cowboys whose culture of fierce pride and self-reliance is still reflected in the Texan character today.
Both Houston and Dallas offer all the amenities one expects to find in modern, cosmopolitan cities, including a wide variety of international cuisines, museums, luxury shopping, entertainment, parks and other open public spaces.
Houston is renowned in particular for its performing arts scene. The city boasts a theater district that is second only to that of New York City in size, and also has its own opera, symphony, ballet and theater groups, some of which have won international acclaim. Houston of course is also home to Yao Ming’s former team, the Houston Rockets.
Lifestyle and entertainment options in metropolitan Dallas are likewise diverse. A variety of natural landscapes in the metro’s outlying areas are suitable for outdoor activities such as horseback riding, boating, hiking and camping. Greater Dallas also offers rich variety of cultural attractions, from art museums with world-renowned collections to cowboy rodeos to numerous annual festivals celebrating the area’s different ethnic groups.
Houston and Dallas both have outstanding public school systems and universities. Dallas boasts the 1st and 8th highest ranked high schools in the United States and its greater metro area has more than 30 institutions of higher learning, including the University of Dallas, University of North Texas, Texas Wesleyan and branches of Texas A&M. Houston is home to more than 20 colleges and universities, among them prestigious Rice University.
About 3,000 people from Guangdong came to Texas in the late 1800s to work on the railroads, and small numbers of Chinese settled in Houston and Dallas around this time. It wasn’t until after World War II, however, that the Texan Chinese population saw significant growth, reaching 25,000 by 1980.
Today, Houston’s Chinatown is the 2nd largest Chinatown in the US, second only to that of New York City, and has 15 Chinese supermarkets and some 25 Chinese schools. While US Census data shows only 70,000 Chinese residents of the greater Houston area, an estimate of 250,000 by the China Daily may be more accurate as it is more recent and many people do not participate in the census.
Eight major Chinese enterprises have opened branches in Houston, including Baosteel, Sinochem, Tianjin Pipe and CMC. Air China operates several direct flights between the city and Beijing each week.
Within the Dallas-Fort Worth metroplex, the city of Plano has the largest Chinese population, estimated roughly at 30,000. The single Chinatown in the metro area is located in the city of Richardson. Both Plano and Richardson have repeatedly ranked among the top 20 best places to live in the US.
Northwest of Richardson, about thirty-five miles from downtown Dallas in the city of Corinth, Beijing-based property developer Lelege Group is building a gated lakeside community of luxury villas that are being marketed in mainland China in conjunction with an EB-5 investment-for-residency scheme. The project is believed to be the first of its kind by a Chinese developer in the US, and its villas were selling for US $2 to $5 million per unit according to a media report.
American Airlines operates direct flights between DFW International Airport and three Chinese cities, namely Beijing, Shanghai and Hong Kong.