Chinese Driven Vancouver Housing Bubble Moves To Seattle – "This Is Vancouver 2.0"
By Tyler Durden
Back in August we noted that the Vancouver housing market was doomed after the implementation of a 15% property tax on foreign buyers targeting the massive influx of Chinese money driving real estate prices to astronomical levels. Sure enough, within a matter of weeks home prices had plunged and so had the volume of residential real estate transactions (see “As The Vancouver Housing Market Implodes, The “Smart Money” Is Rushing To Get Out Now“).
Three weeks after we suggested that the Vancouver housing bubble had popped in the aftermath of the implementation of the July 25 15% property tax in British Columbia targeting the Chinese free for all in Vancouver real estate, we got confirmation of that last week when we reported that only one word could describe what has happened to Vancouver housing in the past month: implosion.
Zolo, a Canadian real estate brokerage, which keeps track of MLS home sales in real-time and reports prices as an average rather than the “benchmark price”, showed as of last week a major correction underway in most Metro Vancouver markets. According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7% over the last 28 days and down 24.5% over the last three months. The average detached home is $2.6 million, down 7% compared to three months ago.
The number of transactions has likewise slammed shut: while August is typically one of the slowest months for real estate transactions, MLS sales data from the first two weeks of the month shows what many have been hoping for during the last few years of escalating prices. According to MLS listing data, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That’s a decrease of 94%.
But, of course, all that laundered Chinese money has to go somewhere…and preferably somewhere without a 15% penalty tax on foreign buyers. So, at just a hop, skip and a jump across the border, wealthy Chinese citizens looking to move hot cash offshore have set their sites on Seattle. According to Bloomberg, within days of the implementation of the new Vancouver tax, real estate brokers in Seattle saw a noticeable increase in inquiries from Chinese buyers.
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.
Shang says she’s been inundated with similar requests from China and Hong Kong after Vancouver’s provincial government enacted a 15 percent tax on foreign homebuyers in August to help cool …read more
Source: Chinese Driven Vancouver Housing Bubble Moves To Seattle – "This Is Vancouver 2.0"
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