Seattle housing market white hot with Chinese demand as Vancouver's market freezes

Published on: September 13, 2016

Realtors say Chinese buyers have switched to Seattle, turning its housing market white hot, because of the uncertainties around new government intervention in the Vancouver market.

Mainland China buyers seeking to invest overseas are fleeing Vancouver and flooding Seattle.

Figures prepared for Postmedia by, 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 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 “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.

Saretsky said he believes figures on Vancouver buyer inquiries reflects on conversations that he and other agents are having with investors since the new tax was introduced. 

“My Chinese investor was in town, and he said ‘We can all afford the 15-per-cent tax, but it creates uncertainty,'” Saretsky said. “He said everybody in China is being told not to invest right now in Canada.” 

The sense from China buyers, Saretsky said, is that B.C. residents are “pissed off” about skyrocketing home prices driven by offshore investment, and that Canadian governments are starting to respond. 

In China, media coverage on the new Metro Vancouver tax has been widespread, Dave Platter of Juwai Limited said. While investors may be turned off by the Vancouver tax, most Chinese citizens seem to approve.

“Interestingly, most public comments left on the online news stories about the new tax are not complaints against Vancouver,” said Matthew Moore, president of the Americas for “Quite the opposite, many people respect the decision to impose new taxes.

“They are coming from a situation where an apartment bought two years ago in Shanghai could be worth 75 per cent more today. So, many feel that more measures should be imposed to cool their own home markets and protect accessibility to property.”

“We are seeing a rush into Seattle as the next market that matters,” Jones said. “I think for Chinese buyers it becomes like a self-fulfilling prophecy. As a group, they know they can move a market higher. It is definitely the most dominant new presence in the market.”

Jones said his company’s top sales in August were for Chinese buyers who set new prices in two Seattle neighbourhoods. They bought homes for about Canadian $6.5 million that would have cost about twice as much in comparable Vancouver neighbourhoods, Jones said. He said one of the buyers has multiple Vancouver properties. But some of his brokers are reporting that Chinese clients are dumping Vancouver property to reinvest at lower prices.

“My two big Vancouver clients are selling their assets there and coming here to do it all over again,” Seattle broker Lilli Shang said. “I have inquiries all the time from investors from China. Money is pouring in.”

Home sales in the Seattle area “continued to outpace year-ago activity,” Northwest MLS reported in early September, though across Western Washington, prices dropped slightly from early summer. MLS data shows that the Seattle neighbourhoods that have been most popular with Mainland China buyers for the past five years, according to Dean Jones, have experienced price rises from between 15 and 27 per cent in August over a year earlier. Jones said that Mainland China buyers represent 3o to 50 per cent of the market in these hot neighbourhoods, such as Bellevue. 

Just like Vancouver, Seattle has its stories about cash buyers from China. The Seattle Times reported the most expensive residence sold in 2015 was a mansion that went for Canadian $17.5 million to an unnamed buyer who paid cash and used a numbered company. Brokers confirmed the buyer was from China, the Times reported.

Dean Jones, owner of Realogics Sotheby’s International Realty in Seattle, said he believes effects of the Metro Vancouver tax will accelerate already hot demand in Seattle from Mainland China buyers.
To illustrate market trends, Jones points to his firm’s use of the popular Chinese messaging app WeChat. Jones said his company can see “viral” interest in Seattle real estate stories on WeChat, and his brokers also use the app to facilitate direct home sales to buyers in China.

“One of our brokers just transferred a title and received a money transfer from China on WeChat,” Jones said. “We can get around China’s Internet block and directly to buyers.”

It is not hyperbole to suggest that Chinese real estate investment rushes have “gone viral” on WeChat.

The Wall Street Journal reported this week that in Shanghai some realtors are under investigation by police for using WeChat to spread false rumours of a supposed government intervention to limit credit for home purchases. The alleged rumours created a social media sensation that “sparked a home-buying frenzy in late August and led to instability in the city’s real-estate market,” WSJ reported.

Not everyone in Seattle is excited about growing crowds of Mainland China investors. Seattle real estate analyst Charles Mudede has warned that unless the city learns from Vancouver’s “real estate crisis,” Seattle will also have vacant condo towers, a housing market disconnected from local incomes and traditional laws of supply and demand, and young people forced to leave the city.

“Something totally insane and even monstrous is happening in this city,” Mudede wrote Aug. 3 in a report filed from Vancouver, titled “A City of Empty Towers.”

However, Jones argues that Seattle has a more balanced economy than Vancouver with high-paying technology industry jobs, and a new homes market that is more geared to purpose-built rental units than luxury condos aimed at offshore investors.

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