Van­cou­ver tax pushes Chi­nese to Seat­tle

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

Just a few days af­ter Van­cou­ver an­nounced a tax on for­eign prop­erty in­vestors, Seat­tle real es­tate bro­ker Lili Shang re­ceived a WeChat mes­sage from a wealthy Chi­nese busi­ness­man who wanted to sell a home in Canada and buy in her area.

Af­ter a week of show­ings, he pur­chased a $1 mil­lion prop­erty in Belle­vue, across Lake Wash­ing­ton from Seat­tle. He soon re­turned to buy two more, in­clud­ing a $2.2 mil­lion house in Clyde Hill paid for with a sin­gle cashier’s check.

per­cent

Shang said she’s been in­un­dated with sim­i­lar re­quests from the Chi­nese main­land and Hong Kong af­ter Van­cou­ver’s pro­vin­cial gov­ern­ment en­acted a 15 per­cent tax on for­eign home­buy­ers in Au­gust to help cool soar­ing real es­tate val­ues. With Chi­nese in­vestors — the largest pool of for­eign cap­i­tal — look­ing for a place to put their cash, the un­in­tended con­se­quence of the fee has been to push de­mand to cities such as Seat­tle and Toronto.

“The tax was the trig­ger of this new wave of in­vest­ment now com­ing to Seat­tle,” Shang said. “Why pay more for the same thing?”

Van­cou­ver, which has seen de­tached-home prices dou­ble in a decade, joined ar­eas in­clud­ing Aus­tralia and China’s Hong Kong in tak­ing steps to slow hous­ing de­mand af­ter an un­prece­dented surge of for­eign in­vest­ment. Chi­nese buy­ers, in par­tic­u­lar, are ac­cel­er­at­ing pur­chases over­seas, spurred by a weak­en­ing yuan and ris­ing prices at home. They’re also ven­tur­ing far­ther afield as costs soar in some of their fa­vored mar­kets.

Home-pur­chase in­quiries from the Chi­nese main­land have jumped in Seat­tle and Toronto since the Van­cou­ver tax was an­nounced, ac­cord­ing to Juwai.com, the coun­try’s largest over­seas prop­erty web­site.

For Van­cou­ver in­vestors, Seat­tle is a lure be­cause it’s a wa­ter­front city just a few hours away by car. It’s also more af­ford­able than other West Coast des­ti­na­tions. Toronto, as one of the world’s fi­nan­cial cap­i­tals, al­ready has an es­tab­lished base of for­eign in­vest­ment in con­do­mini­ums and a large Asian pop­u­la­tion.

“Chi­nese money isn’t go­ing

BLOOMBERG

Cold­well Banker Bain real es­tate bro­ker Mark Reys pre­pares to hang an "Open House" sign out­side of a home for sale in Seat­tle.

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