Seattle property is getting more looks than its sister city to the north.
The Vancouver Sun reports that figures from Chinese website Juwai.com, which connects investors with international home sellers and real estate agents, shows property buying inquires from foreign investors shot up in August compared to August 2015. Meanwhile, inquiries in Vancouver, B.C. dropped 81 percent in August.
The cause, according to the Sun, could have to do with the recently introduced offshore investor tax.
“Realtors in Seattle and Vancouver said the data suggests growing nervousness among Chinese investors over increasing regulation of Metro Vancouver’s market,” the Sun reports.
The change has been going on for some time, with demand increasing for cities with cheaper entry prices, Dave Platter of Juwai.com told the Sun.
The offshore tax adds an extra 15 percent in property tax fees on residential real estate being purchased by foreign buyers.
Though the Canadian government said in August it was too soon to conclude how the market would respond to the tax, sales of single-family homes have steadily declined and prices of luxury homes have been getting slashed.
That is a drastic difference to Seattle’s home prices, which continue to rise at an exceptional rate compared to a year ago. In June, reports showed a double-digit pace of home prices — twice the rate for the country’s 20 largest cities.
Home prices in Seattle increased by 11 percent. Portland home prices rose by 12.6 percent. Compared to the other top 20 markets in the nation — the average bump was only 5 percent — Seattle and Portland are almost unmatched. The exception is in Denver, another city where price gains continue to rise.
Of course, the foreign buyer tax in Vancouver could increase interest in other Canadian cities as well. Sotheby’s reported the Greater Toronto area had a more active market this summer than expected. That trend will most likely continue, particularly for the single-family home market, according to the firm.