Bellevue, Wash. – Since late July, when Vancouver, B.C. started implementing a 15 percent tax on home buyers who do not have Canadian citizenship or permanent residency, foreign buyers have intensified their attention on the Seattle real estate market.
A website called Juwai.com, a search engine for Chinese buyers to find international property, noted a drastic decrease in searches for “Vancouver” in the last few months.
The global communications director for Juwai Limited said searches for Vancouver properties decreased 8.9 percent in November, compared to November 2015.
At the same time, searches for Seattle from Chinese buyers on Juwai increased 63 percent in August compared to the same month in 2015. Similarly, inquiries increased 93 percent in September, 78 percent in October, and 140 percent in November.
Shelly Zhou, a broker with Realogics Sotheby’s International, said she currently has three clients who changed their search from Vancouver to the greater Seattle area.
Zhou said she used to have clients asking for referrals for Vancouver real estate agents.
“Now I have a number of Vancouver agents, send their clients to me,” she said.
Most foreign buyers are interested in the high-end, luxury market, buying properties worth more than $1 million. Zhou said Asian people like to invest in real estate, sometimes using properties as a second home, or to rent out.
They particularly like buying on the Eastside, close to good schools and waterfront views.
If they decide to rent out their units, she said the rent could reach $30,000 per month.
While Zhou is seeing great success because of this trend, she also views the phenomenon as a Bellevue resident of 29 years.
She sees older couples retiring, trying to downsize, but unable to afford staying in the same neighborhood. She also sees young people trying to buy their first homes in the city they grew up in, but finding little inventory at huge prices.
“For the kids who have grown up in this area, and come back later when they become adults and have their own family it’s hard too. It’s kind of heartbreaking for me,” she said.
But the answer to the affordability question does not seem to rest in a foreign buyer’s tax, according to Tina Mak, the founding president of the Vancouver chapter of the Asian Real Estate Association of America.
“Most people, they really don’t care. Psychologically, you will stop some speculators - speculators will want to make quick money,” Mak said.
Speculators may look to other markets like Seattle or Toronto. But Mak said those who are interested in Vancouver won’t mind paying the extra 15 percent tax, because of the weak Canadian dollar.
While home sales have dropped more than 30 percent after this tax was implemented, Mak believes this is psychological and temporary.
She said only the luxury single-family home value has stabilized. Mak does not believe the rest of the market has been affected by the tax.
KIRO 7 asked Seattle and King County elected council members whether they have any interest in implementing a similar tax.
Only Councilmember Mike O’Brien’s office has indicated that he is interested in exploring a tax on speculative home buying, but he is not interested in targeting foreign buyers. Still, the state of Washington would have to grant the city of Seattle authority to impose any tax of this kind.