China is studying the possibility of investing a portion of its $3.4trn in foreign exchange reserves into US real estate, although the two individuals that have revealed the study have asked not to be identified.

The State Administration of Foreign Exchange in China reportedly began the study after seeing signs of a recovery in the US property market and the Chinese Government may acquire properties, invest in real estate funds or buy stakes in property companies, they said.

The safety of the investments will be the top priority, said the people, who didn’t elaborate on a timetable or other details.

China has set up an operation in New York to make alternative investments in the US, an effort by the country’s foreign-exchange reserves manager to diversify away from US government debt, the Wall Street Journal reported last week.

Prices for single-family homes increased in 89% of US cities in the first quarter as the housing market extended its recovery following a five-year slump.

The median sales price rose in 133 of 150 metropolitan areas measured, up from 74 areas a year earlier, the National Association of Realtors reported in early-May.