Vancouver's Foreign Buyer Tax Sending Chinese Buyers to Seattle
Mainland China buyers seeking to invest overseas are fleeing Vancouver and flooding Seattle.
Figures prepared for Postmedia by Juwai.com, a popular website in China that connects investors with international home sellers and real estate agents, shows buying inquiries for Vancouver property from investors in Mainland China dropped 81 per cent in August after B.C.’s government introduced a Metro Vancouver offshore investor tax. Meanwhile, buying inquiries for Seattle homes on Juwai.com surged by 143 per cent in August, compared to August 2015.
Realtors in Seattle and Vancouver said the data suggests growing nervousness among Chinese investors over increasing regulation of Metro Vancouver’s market. As a result, Seattle, with a similar quality of life, better wages, and homes generally at least 50 per cent cheaper, is overtaking Vancouver as a preferred destination for Mainland China buyers.
“The shift to other cities has actually been going on for months, with buyer demand momentum shifting to other cities with similar appeal but lower entry prices,” said Dave Platter of Juwai.com. “Right now, Seattle is the No. 1 city in North America for Chinese buyer inquiries, even displacing Los Angeles.”
Juwai’s figures on cooling interest from Chinese buyers are confirmed by Metro Vancouver MLS figures that show deep sales drops in August, especially in housing types and neighbourhoods most popular with Chinese buyers. And MLS data from Vancouver realtor Steve Saretsky shows sales drops are even worse in September, with weakness spreading from sales of luxury detached homes to broader portions of the market including townhouses and condos.
“September is horrible,” Saretsky said. “The sales are on pace for historic lows for the past 10 years.”
Compared to the first 11 days of September 2015, Multiple Listing Service data analyzed by Saretsky shows sales of detached homes in September 2016 in Vancouver West are down 51 per cent, Vancouver East is down 80 per cent, Richmond is down 67 per cent, and Burnaby is down 69 per cent.