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Seattle vs Vancouver - A repeat of the past, or a lesson from the past?

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For immigrants and immigrant families from Asia, the metropolises like San Francisco, Los Angeles, and Vancouver have been beacons of light to a new world of prosperity. Now that China buyers have adapted to the shift in North American life over the generations, their experiences and trends are more directed toward considering Economic fundamentals, financial circumstances, and educational opportunities, as well as the overall quality of life, are practical factors. As a result, factors such as relative purchasing power, capital appreciation potential, and even Vancouver's recently implemented 15 percent special transaction tax for foreign homebuyers. Making it no surprise that interest in alternative markets like Seattle is growing by the day. These new international gateway cities will eventually become the focal point of a new generation of hipsters.

Matthew Moore, President for the Americas market for juwai.com, China's popular residential real estate search portal, noted that there has been a significant shift in the market: "Compared to the same time last year, the number of home purchase inquiries for Seattle in August 2016 on the website have a 143% increase; meanwhile, inquiries in Vancouver are down 81% compared to the same time last year. And the data changes are concentrated at the high end of the market.

"Towering mountains, dense forests, blue waters of Puget Sound, high-quality schools, a vibrant and diversified economy, and no state's income tax (unlike California), the Greater Seattle area is attractive from the inside out, and in recent years has seen a flurry of investment from China buyers. Compared to traditionally popular destinations such as Vancouver and San Francisco, which have long been popular with immigrants, the Pacific Northwest has long maintained a Low profile, thus, fortunately, avoiding the bubble trap created by high growth driven by non-resident investment in real estate. However, industry experts believe this may be an unavoidable future. Trained experts immediately see that Seattle and Bellevue are developing much like Vancouver, only with a gap of about two decades between them.

Dean Jones, President, and CEO of Realogics Sotheby's International Realty, located in Seattle, also a Canadian citizen and former resident of Vancouver feels a similar sense of current Seattle metropolitan area. His real estate firm has been working to promote local real estate to China immigrants and other Asian buyers, exclusively launching the WeChat portal platform which has established an in-house Asian service team, bringing together an entire team of real estate advisory specialists, all with specialized language skills, providing professional services and logistical support to foreign buyers. Jones, who also serves on the board of directors of the Washington State China Exchange Council, said the region is ready for a wave of overseas Direct investment.

"It feels like history is repeating itself, only switched to the south of the Canadian border," said Jones, referring to the past two decades of relying on international Immigration and investment are booming in the Vancouver metropolitan area. "Savvy investors won't miss a single development opportunity, from major China developer holdings to China airlines and more. Both agree that the Seattle region's economic fundamentals are impeccable. Fortunately, overseas demand has been the icing on the cake for our domestic demand drive, with further growth in employment, population, and wealth. The Pacific Northwest's growth in median home prices and rents is second to none in the nation.

"In stark contrast to Vancouver, the housing market in the Puget Sound region is not dependent on immigration or foreign direct investment to boost it. Instead, it has been steadily attracting productive capital from local knowledge-intensive businesses. Microsoft, Amazon, and Expedia are all based here, and Google and Facebook have a large local presence workforce, with Apple and China-based Alibaba competing to announce their office expansion plans. Since the 1980s, Seattle's high-tech component has been steadily growing. These high-paying jobs are attracting a multitude of employment forces, creating a high-income employment force. According to the government agency that issues the licenses, in July 2016 alone, more than 22,000 out-of-state drivers obtained Washington driver's licenses are up 30 percent from the same period last year, with a total of 30 percent more licenses from California, Oregon, and Texas. A total of 410 of those who obtained a driver's license in the same period were new registrants from Asia (77 of them from China), with 86 percent concentrated in the provinces. In King County (WA). Census data show that Asians are the fastest-growing ethnic group in the region, particularly in the East End.

As its influence grows with each passing day, so does Seattle's local cultural stature, and in 2015 China President Xi Jin Ping's visit is proof of this. Direct investment from China is surging and the immigration pipeline is flooding. At the same time, Bellevue is home to the world's only Global Innovation Exchange (GIX), which is run by the University of Washington, Beijing's Tsinghua University and Microsoft have created a pioneering partnership to conduct unique high-tech educational programs.

The Greater Seattle metropolitan area has positioned itself as a place where China families can afford to live and enjoy life, and where sustainable development is possible in the 21st century. An area of the economy where family wealth accumulates. Buyers from Mainland China, as well as China resident buyers who have been in the area for generations, have supported luxury homes in the popular East End neighbourhood (30 to 50 percent). The uniquely scenic Bellevue community on the Newport Coast, with its abundance of beachfront luxury homes and Venetian-like crisscrossing waterways, from the three consecutive years 2011, 2012, and 2013, there was not a single sale for more than $3 million of luxury homes. Then came a surge in popularity, with three $3 million-plus properties sold in one fell swoop in 2014, jumping even higher to eight in 2015. All of the 11 properties 9 were sold to China buyers, and the 2015 sales champion was a beachfront property on the north end of Mercer Island, which sold for a whopping $13.8 million and is actually owned by a China citizen, despite being acquired in trust. Most recently, Jones confirmed that the (intended) August 2016 sales crowns and runner-ups for brokers under him were each for a Juanita area building that sold for up to $5.49 million for a beachfront mansion, and a $4.85 million equestrian estate on the bridle trail, both hitting new price records in their neighbourhoods were set by the same China buyers.

"Properties that have reached luxury levels in the Pacific Northwest are actually still within the price range for international buyers," Jones observes, "Especially compared to that handful of supercities on the West Coast, these record prices are simply worth every penny.

"Greater Seattle has attracted some of the world's top real estate developers to the area to develop and build brand name homes and mixed-use developments. Stroll through Bellevue or downtown Seattle and you'll see cranes towering above you in the midst of a frenzy of development. Renowned developers from across Greater China such as Vanke, Plus Investment Management, Eagle Group, and Tophorn International Group are all working hard to develop their projects. New construction projects are being developed, and some of the most valuable commercial office buildings in the area, such as the 76-story Columbia Tower, are being affected by the investment funds based in Hong Kong or mainland China offer to buy. Other, more diffuse and individual projects are funded using the USCIS EB-5 Immigrant Visa Program, an immigrant investor visa program. project by investing at least $500,000 per foreign immigrant family, most of which are China, ineligible projects, in exchange for the opportunity to become U.S. citizens. In short, China developers use the money of individual China immigrant families to build developments, which in turn are sold to those who have already been new immigrants living in the United States, and other China families planning to immigrate to the United States.

大西雅图地区由内而外散发吸引力,近年来更是掀起了中国买家扎堆投资的浪潮。

The Greater Seattle area attracts Chinese buyers.

At first (until the 2014 immigration policy reform), Canadian investment immigration was a simple business transaction, with immigrants going directly to the Government funds are deposited with a threshold amount of money, and then the overseas assets are converted into Canadian real estate. In many cases, no one cares about the actual resale value or maintenance requirements of the assets purchased. As Vancouver city planner Andy Yan says, Vancouver has become a "hedge city" - a city of "hedges" - with a focus on the residence as an international wealth safe in the form of a safe deposit box, and a strategic windbreak[1] insulating the country from a potential economic crisis. Even after the 2014 Canadian visa reform, due to, President Xi Jin Ping's ongoing fight against corruption in China, this property conversion is continuing. However, such price spikes, driven by bids from overseas buyers, are quickly outstripping the affordability of the local Vancouver economy and the ability of local Canadians to afford to buy. Canada's B.C. government has denied for years that the purchasing power of overseas buyers has inflated local property prices, instead attributing the surge to the economic situation in China was rosy.

Until two years after Canada terminated its original investor visa program and returned 60,000 applications (the vast majority of which were China). It was only when the government became convinced of the fact that there was a direct correlation between overseas buyers and local house prices. When the summer of 2016 arrived, the B.C. government, led by Premier Christy Clark, finally came to its senses, but acted hastily, and directly initiated a 15 percent property transaction tax on non-resident foreign homebuyers in the Vancouver metropolitan area and announced that it would take effect the following month (Aug. 2, 2016).

The lightning passage of the bill was a bolt from the blue for Canadian real estate professionals and their clients, resulting in extreme market disruption. According to the Real Estate Board of Greater Vancouver, the number of single-family home sales plummeted 44.6 percent [2] in August compared to the same month last year, while the median price still a slight gain, 16.7% decline from July, the largest monthly decline in 39 years[3]. New listings were also down 18.1% from July, and in Richmond, Vancouver, and Burnaby, the number of home sales fell by as much as 50%, making the decline notable (Property insider Steve Saleski [4].

Meanwhile, home prices elsewhere in BC continued to climb compared to the same time last year, with Victoria up 19.2%, confirming that Vancouver's plummeting home prices are really the effect of the foreigner property transaction tax.

"It's too early to tell if this is a sustained market correction or just a brief pause," Sotheby's International Realty Canada 's president and chief executive Brad Henderson said. "Clearly, both China and international, are on the fence. The new tax policy is unlikely to change long-term demand and will likely be largely absorbed by the market over time through pricing," said Brad Henderson, president, and CEO of the company. In the meantime, alternative markets, such as Victoria, Toronto, and even Seattle in the US, could benefit.

"Moore, President of North America Juwai.com, agrees: "Home purchase inquiries on Toronto jumped 143% in August, which is a significant increase over the past three years.

The highest-ranking month."No need to worry about the Puget Sound Regional Government, imposing an additional transaction tax on foreigners. As Realogics, Sotheby's International Realty stated in its click-forwarding-heavy WeChat article, "In Washington State. Neither our state nor city government currently has a special property transaction tax or transfer tax for foreign buyers, nor have they proposed any similar bills. Thus, for the foreseeable future, the only impact on the real estate market in the Seattle and Bellevue metropolitan areas will be compared to our neighbouring countries, foreign buyers have increased their relative purchasing power locally." Moreover, whether in Seattle or Bellevue, the results (of house price growth) due to non-resident investment in real estate are nowhere near as good as in Vancouver The level of the population. Immigrant individuals who come to live in this area are mainly students, workers, and their families, who move here for a better life.

In fact, Seattle's quality of life compares favourably to other West Coast gateway cities, when you consider its cost of living for the money, it's more exclusive than ever. In the ranking of the most expensive cities to live in major international markets (US market research firm Demographia), Vancouver ranks third in the world. San Francisco is seventh, and Los Angeles is tied with San Diego for ninth. Seattle is ranked 22nd, which is higher than all of these cities, as well as Toronto, New York, Miami, Boston, and others. A recent report by Realogics Sotheby's International Realty has highlighted Vancouver, San Francisco, and Seattle, Bellevue metropolitan area for an in-depth comparison, and thus to explain why strong fundamentals and market values emerge in these gateway cities [5]. In August 2016, the median price for a single-family property in the Seattle/Bellevue metropolitan area was 67 million, up 9.8% year-over-year. For the same period of comparable data, the median price in San Francisco reached $116,400[6] and in Vancouver was even higher at $1,214,250 [7], 65.1% and 81.2% higher than Seattle, respectively.

In a series of articles published earlier this year, local Seattle architecture and real estate author Charles Moodydd asserted that Seattle's destiny is inevitable, it will repeat the mistakes of Vancouver or San Francisco, and eventually exceed the purchasing power of the economy. If you look at it closely, you could say that Vancouver's dilemma is the lack of a successful industrial base, which is the very thing that feeds Seattle. Time and time again, the citizens of Seattle have proven that they can make the right choices at the right time to advance and improve the quality of their lives. It's all instructive for future home prices in the Puget Sound region. "It's not just a question of affordability or even lifestyle, it's a question of the prospect of appreciation," Jones Adding. "A significant portion of the continued growth in house prices in Pacific Rim cities can be attributed to overseas demand, which has now begun to Take root in Seattle."

Hong Kong, Sydney, San Francisco, Vancouver, and Seattle share one thing in common: their geography. Due to its topography, Seattle's future development will not be infinite horizontal expansion but will be forced to develop vertically, and house prices will be vertical rising. Since 2011, real estate prices in King County have been rising steadily at a compound annual growth rate of 7.17%[8]. Seattle has gained world-class recognition, garnering global attention for its cultural and natural appeal. At the same time, realtors are ready to embrace their wealth of opportunity. As Jones says, "Global citizenship is not a fad, it's a movement, and global real estate brokers, as represented by Sotheby's International Realty, respond positively to this emerging international demand."

The Columns of Ban, BF property executive Vice President
Feel free to email us at editorial@juwai.com if you have any questions. This is an exclusive article from Juwai.com.

This article is contributed by Juwai Columnist Ben Briggs.

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