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Anywhere but home

June 15, 2012

The Chinese like the Indians are increasingly looking to park their money abroad. Having made it rich, equities, real estate and foreign travels are what many are splurging on in what is seen by many as an attempt by the country’s rich to increasingly take their money out.

While India’s government has long being working with swiss authorities in trying to bring the billions it estimates are darkly embezzled from the nation, a recent report published by the National Association of Realtors said buyers from China and Hong Kong made up the second-largest group of foreign buyers of homes in the US in the 12 months to March – Canadians took first place – accounting for US$9 billion of sales a 23 percent increase on the US$7.3billion of sales they notched up in the previous 12 months and an 88 percent increase from US$4.8billion of sales in 2010.

Pamela Liebman, chief executive of The Corcoran Group, a residential real estate brokerage company, told the Financial Times that there has been a “huge” influx of wealthy mainland Chinese shopping for high-end properties in New York since the start of the year.

“It’s extraordinary,” she says. “Five years ago, we never talked about Chinese buyers. We started noticing them 18 months ago but they have only become much more prevalent in the past year.”

Lucrative prospects in Europe and the US, buoyed by uncertainty in China and India are prompting many to take their cash elsewhere. Political turmoil, social unrest, high taxes and much better returns on investments are only some of the reasons citizens state for their financial flight.

Many in both India and China have made their millions in the past few years, technology, an emerging nation status where money poured in coupled with high growth numbers, meant that the rich only got richer and when there’s too much, one always tends to spread the wealth, which is what analysts expect wealthy Indian and Chinese are doing. Constantly looking for new avenues to park their wealth, it’s the financial flight which has caught their fancy.

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