Seat­tle real es­tate even hot­ter af­ter BC tax

China Daily (USA) - - ACROSS AMERICA - By LINDA DENG in Seat­tle lin­dadeng@chi­nadai­lyusa.com

Seat­tle, a pop­u­lar des­ti­na­tion for wealthy Chi­nese real es­tate in­vestors, is heat­ing up even more as a new tax across the bor­der in Van­cou­ver is send­ing more buy­ers to the Puget Sound.

“The tax (15 per­cent on for­eign buy­ers) 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.

“Dur­ing the past two years, about 50 per­cent of my list­ings have been pur­chased by in­ter­na­tional Chi­nese buy­ers, and cur­rently about 65 per­cent of our show­ings are to Chi­nese buy­ers liv­ing in China or Van­cou­ver,” Ri­ley said.

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.”

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.

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.

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 United States 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.

“Our cities have ini­ti­ated many events to at­tract more in­vestors. For ex­am­ple, the mayor of Seat­tle, Ed Mur­ray, in­vited the mayor of Shen­zhen, China, to visit.”

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.

“Chi­nese in­vestors con­tinue to show a strong ap­petite for US devel­op­ment as­sets in gate­way cities and in­creas­ingly in other mar­kets with strong real es­tate fun­da­men­tals such as Dal­las and Seat­tle,” said Roger Power, leader for KPMG’s US China Real Es­tate Ini­tia­tive.

The Chi­nese In­sur­ance Reg­u­la­tory Com­mis­sion en­cour­aged Chi­nese in­sur­ance com­pa­nies to in­crease over­seas in­vest­ments by per­mit­ting in­vest­ment of up to 15 per­cent of their as­sets over­seas.

Cre­ate World In­ter­na­tional Inc, a con­glom­er­ate founded in Hong Kong Spe­cial Ad­min­is­tra­tive Re­gion in 1997, has worked with Kidder Mathews in 2015 on a land deal for a mul­ti­fam­ily high-rise devel­op­ment in Belle­vue, Wash­ing­ton, now un­der con­struc­tion. Cre­ate World also in­vested in an­other project in the Seat­tle Metro mar­ket — a 26-story, 242-unit apart­ment build­ing.

The Seat­tle ven­ture will be the first high-rise res­i­den­tial devel­op­ment in the South Lake Union tech­nol­ogy hub. It is close to Ama­zon.com Inc of­fices, the Bill & Melinda Gates Foun­da­tion and the Univer­sity of Wash­ing­ton Med­i­cal School.

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