Van­cou­ver real es­tate eas­ing is Seattle’s gain

China Daily (Canada) - - FRONT PAGE - By LINDA DENG in Seattle and HENG WEILI in New York

The Van­cou­ver real es­tate mar­ket is feel­ing the chill from a re­cent 15 per­cent tax on for­eign buy­ers of real es­tate, the byprod­uct of which is ben­e­fit­ting Seattle, its large US neigh­bor to the south.

Both cities have long been pop­u­lar with over­seas Chi­nese real es­tate in­vestors.

The Bri­tish Columbia pro­vin­cial govern­ment was mo­ti­vated to ini­ti­ate the tax by Van­cou­ver home val­ues wildly ap­pre­ci­at­ing at the rate of C$1,000 a day, ac­cord­ing to Bloomberg.com. The over­heated real es­tate mar­ket had be­come cost-pro­hib­i­tive to many Van­cou­verites.

The tax does not ap­ply out­side the Metro Van­cou­ver area.

Metro Van­cou­ver home sales to­taled 2,253 in Septem­ber, a drop of 32.6 per cent from the 3,345 sales recorded in the prior year, and a de­cline of 9.5 per cent com­pared to Au­gust, when 2,489 homes were sold, ac­cord­ing to fig­ures re­leased by the Real Es­tate Board of Greater Van­cou­ver on Tues­day. Last month’s sales also were nearly 10 per­cent be­low the 10-year sales av­er­age for the month.

“There’s no doubt — the num­ber of trans­ac­tions has gone down and homes are on the mar­ket longer,” said Dan Mor­ri­son, pres­i­dent of the

The tax in Van­cou­ver is in­creas­ing the num­ber of peo­ple look­ing in Seattle.”

real es­tate board told Bloomberg.com. “The tax spooked every­body, and even lo­cals are now hold­ing back and watch­ing.”

“Own­ing a home should be ac­ces­si­ble to mid­dle-class families, and those who are in a po­si­tion to rent should be able to find a suit­able home,” BC Pre­mier Christy Clark said in a state­ment in July.

“I’ve been call­ing for years now for the province to take bold ac­tion to deal with hous­ing af­ford­abil­ity, and the im­pact of global cap­i­tal on our mar­ket here,” Van­cou­ver Mayor Gre­gor Robert­son said.

“The tax in Van­cou­ver is in­creas­ing the num­ber of peo­ple look­ing in Seattle,” said Anna For­tune Riley, pre­mier prop­er­ties direc­tor at Win­der­mere Real Es­tate.

“In fact, some Van­cou­ver agents are ac­com­pa­ny­ing their clients down to Seattle and help­ing them look here,” she said. “The most pop­u­lar price range is $2 mil­lion to $3 mil­lion, but in­ter­na­tional buy­ers have also pur­chased some of our most prized and ex­pen­sive real es­tate, in­clud­ing wa­ter­front as high as $9 mil­lion.

Juwai.com, a web­site in China that con­nects in­vestors with in­ter­na­tional home-sellers, shows in­quiries for prop­erty in Van­cou­ver from the Chi­nese main­land fell 81 per­cent in Au­gust af­ter the tax was im­ple­mented. But in­quiries for Seattle homes surged by 143 per­cent in Au­gust com­pared with Au­gust 2015.

Dean Jones, prin­ci­pal and owner of Realog­ics Sotheby’s In­ter­na­tional Realty | Realog­ics Inc in Seattle, told China Daily that since the Au­gust tax in­crease in the Cana­dian city, he’s seen several sig­nif­i­cant sales, all to Chi­nese.

“We know that in the lux­ury seg­ment above $2 mil­lion on the East­side, Chi­nese buy­ers are now be­tween 30 to 50 per­cent of the con­sumers.”

The US Na­tional As­so­ci­a­tion of Re­al­tors said Chi­nese buy­ers bought $1.6 bil­lion worth of real es­tate in Wash­ing­ton state in 2015, out of $27 bil­lion spent across the coun­try that year.

Andy Yip, an in­ter­na­tional real es­tate ad­viser at Realogic Sotheby’s In­ter­na­tional Realty, of­fered other rea­sons why Seattle is de­sir­able.

“The liv­abil­ity of Seattle is very high to start with, com­bined with the in­creas­ing busi­ness op­por­tu­ni­ties; it is just be­ing dis­cov­ered in re­cent years,” he said. “As the hot money in Sil­i­con Val­ley cools, Seattle is tak­ing in a lot of res­i­dents from California ev­ery year from the field of IT. Af­ter all, Seattle home prices are about 60 per­cent of San Fran­cisco’s.

“The US dol­lar will ex­pe­ri­ence an ex­tended pe­riod of ap­pre­ci­a­tion against the RMB,” he said. “Those with the means to transfer wealth from China to the US see real es­tate pur­chase in the US as a pri­mary wealth man­age­ment strat­egy.”

“Es­pe­cially in the last three years, we see tremen­dous growth of Chi­nese in­vest­ments,” said Holly Yang, the head of the Kid­der Mathews China Ser­vices Group in Seattle.

“Our cities have ini­ti­ated many events to at­tract more in­vestors,” she added.

Over­all, the US real es­tate mar­ket has be­come a fa­vorite des­ti­na­tion for Chi­nese in­vestors, reach­ing an es­ti­mated $10 bil­lion in in­vest­ment, with ap­prox­i­mately $4.4 bil­lion be­ing in­vested in com­mer­cial prop­er­ties in 2015, ac­cord­ing to KPMG’s China In­bound In­vest­ing in US Real Es­tate-2016 Semi-An­nual Up­date re­port.

Con­tact the writer at lin­dadeng@chi­nadai­lyusa. com

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