Vancouver real estate easing is Seattle’s gain
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