From today’s Sun:
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.
A comment that “Mainland China” is not a monolith:
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 Juwai.com. “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.”
And, that it is predatory speculative money, rather than nicey nicey homebuyers’ money, moving down the I-5:
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.
“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.”
And, the rush to the exits?
“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.”
The party’s over? Good riddance, though I doubt they’ll clean up the mess they made.
I will believe the party’s over when prices go down to mid-2000’s levels. The unaffordability pundits, such as Kerry Gold, who routinely overlook land use and the missing middle in housing types in favour of a pure speculation and a Vancouver-is-Monaco narrative, will be right if today’s average prices are at least halved as the result of the tax.
Otherwise I suspect prices will just bump down to boring, un-newsworthy supply and demand parameters, probably only a couple of notches from the level that generated such hyperbolic discussions on ‘dem rich foreigners who ate the neighbourhood.
I had a real estate agent knock on my door the other day, the first time that’s happened in probably a decade or so. It gives me the impression that there’s enough uncertainty in the market that people are waiting to see what happens.
I’m hopeful that the new tax will help to return the market to some semblance of normal. But low interest rates and zoning that allows suites and laneway houses on single family lots have still made Vancouver a lot more attractive than it used to be, so I don’t expect prices to go down all that much.
[Ed: comment removed for violation of comment policy]