Vancouver tax pushes Chinese to Seattle
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.
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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