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Why are so few American billionaires getting rich from real estate, the big land tycoons are all located in Asia?

Why are American billionaires so “lost” in the real estate field?

Forbes magazine recently announced the 36th billionaire ranking, in which, the US is home to most of the “tycoons” who got rich thanks to technology.

Elon Musk, CEO of electric car company Tesla and space company SpaceX is currently at the top of the list of the richest billionaires in the world with a total worth of $ 265 billion, up to the present time. The throne in the top 10 technology billionaires for many years has always been maintained by this eccentric man.

Second on the list is the founder of giant technology company Amazon, Jeff Bezos. Currently, Bezos’ net worth has reached $183 billion, making him the second-richest person on the list of technology billionaires and also the second-richest person in the world.

The top 10 technology billionaires also include Bill Gates – Microsoft co-founder, Larry Page – Alphabet co-founder and Larry Ellison – Chairman and CTO of software giant Oracle.

It can be seen that American billionaires make up the majority (9/10) of the top 10 richest technology “tycoons” in the world. Ma Huateng, Chairman of Internet giant Tencent Holdings, is the only Chinese in the list of 10 technology billionaires announced by Forbes.

However, if you look at the list of the top 10 billionaires who got rich through real estate, the US seems to be lost.

According to the Bloomberg Billionaires Index, the world’s richest real estate billionaire is currently Li Ka-shing, one of the most influential Hong Kong businessmen in Asia, holding a valuable fortune of $31 billion. Although he officially left the chair of CK Hutchison Holdings and CK Asset Holdings in May 2018, billionaire Li still holds the role of a senior advisor and has so far not lost his position as one of the leading businesses in the world.

Second on the list of the world’s richest real estate billionaires is Lee Shau-kee, who has been dubbed the “Warren Buffett of Hong Kong”. He is the founder of Henderson Real Estate Development and Investment Group, known for his generosity and has donated millions of dollars to the education sector over the years.

Yang Huiyan, a major shareholder of the real estate company Country Garden, is also in the top of the youngest and richest billionaires in Asia. She is currently ranked 4th in the top 10 richest real estate billionaires in the world, behind Mr. Dan Gilbert, a large American businessman and philanthropist.

According to the Bloomberg Billionaires Index, 6 of the 10 richest real estate billionaires in the world are from China or Hong Kong (China) – where housing prices are the most expensive in the world. Asia seems to become the “cradle” of the real estate industry, which is constantly blossoming.

“Real estate is forecasted to grow strongly in Asia in the future, as real estate continues to be the preferred asset channel for both the super-rich and the middle class,” said Knight Frank.

Vì sao rất ít tỷ phú Mỹ giàu lên từ BĐS, những ông trùm đất đai sừng sỏ đều nằm ở châu Á? - Ảnh 3.

The proof is that Hong Kong in recent years has always had a land fever – which can make ‘tiny’ apartments of only 17m2 be “inflated” up to nearly $210,000.

In addition, according to Demographia’s annual International Housing Affordability Study 2021, the average Hong Kong household will have to tighten their belts for 20.7 years to afford a home because of the high prices. Cushman & Wakefield even estimates the value of apartments will continue to increase by 5% in the second half of the year.

According to JLL’s Asia Pacific Tracker 2021 report, last year, the commercial real estate market in the Asia-Pacific region attracted strong capital flows even though this was a time when many new strains appeared.

Specifically, this area has attracted $177 billion of direct investment in office real estate, retail, logistics, data centers…, up 26% over the same period last year. Markets witnessing strong growth momentum include Australia, China and Japan.

Asia Pacific real estate investment volumes down 23% quarter-on-quarter - JLL | RE Talk Asia

Meanwhile, the US does not have the concept of “savings” – the lifestyle of the vast majority of Asians. Instead of buying a house, they just pay rent to avoid taxes. That’s why many properties sell for as little as $1 because the previous owner owes too much tax and the new buyer has to pay off the debt to own it.

The thinking of real estate billionaires in the US is therefore very different, because for them, investing is not simply buying a vacant lot and then speculating and buying it again and again. Instead of dividing plots for sale, these billionaires develop them into projects and build long-term orientation, even considering these as great contributions to the locality.

Former US President Donald Trump is a typical example of this investment view of the majority of American businessmen. He believes that speculative buying and selling in the real estate market is quite dangerous and it is not possible to get rich overnight. So, instead of taking risks, this billionaire advises people to just buy, hold land and wait for opportunities in the long term.

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