Realogics Sotheby’s International Realty (RSIR) reports a surge in home sales to Mainland Chinese buyers since the recently imposed 15-percent foreign buyer tax in Vancouver, BC on August 2, 2016. The firm recorded four record closings in popular Eastside neighborhoods in recent weeks including Redmond’s English Hill at $2,988,000; East Redmond acreage at $5,250,000, a Bridle Trails estate at $4,000,000 and a Kirkland waterfront home in Juanita at $5,350,000 – each setting new benchmark prices with overseas buyers. Members of RSIR’s Asia Services Group confirm inquiries about investment and immigration in the Seattle/Bellevue region has increased motivated in part by concern over potential policy shifts under the new Trump administration.
“For now, Chinese Nationals enjoy 10-year multi-entry visas into the US as well as opportunities for EB-5 investments that can lead to US citizenship,” said Dean Jones, President & CEO of RSIR. “We anticipate these programs will remain in place but it’s too early to tell. Global wealth seeks financial safe harbor and sudden policy changes in China and Canada, in part is what diverted demand here in the first place.”
In 2014, Canada reversed some 45,000 applications for residency visas (mostly Chinese) in what is now a far more onerous foreign investment program. Then in 2016 the BC government imposed a 15-percent foreign buyer tax on non-resident property purchases within the City of Vancouver and by 2017 the city will impose tax and penalties for owners of vacant houses. These policies aim to curb what had been a boundless level of foreign buyer activity in Canada over the past twenty years. These trends have driven Vancouver to become one of the most expensive real estate markets in the world. Home prices today are easily twice the price of the Seattle / Bellevue metro areas despite being just 140 miles south.
“Seattle has become the new West Coast gateway city for individual and institutional investment,” adds Jones. “It’s like a modern day gold rush of property purchases because our market fundamentals and investment programs align. Prices are rising quickly and savvy investors know foreign capital is trending this direction. They want to get in on the ground floor.”
Becky Gray, a Global Real Estate Advisor with RSIR agrees. She has adopted numerous techniques and marketing approaches to make her property listings appeal to foreign buyers. In addition to translating marketing materials in Mandarin, she advertises properties within RSIR’s all-Mandarin Seattle Luxury Living magazine, promotes the region on an exclusive Wechat app, and regularly exercises her firm’s unique Asia Services Group to address the language and logistics associated with international interests.
Gray’s most recent sale – Prima Vista Estate located at 10907 80th Place NE in Kirkland’s Juanita neighborhood – is just the latest sale to a Chinese buyer. At $5,350,000 it is the highest price paid for a waterfront home north of Central Way in Kirkland and for good reason. The all-inclusive “lifestyle package” comprised of the 8,060-SF home on 70-FT of waterfront, which included all the furniture, audio/visual equipment, select artwork and even a 27-FT Cobalt boat on a boat lift. In order to expose the property, Gray partnered with a local yacht broker to tour typical waterfront neighborhoods sought by Chinese buyers but showcased the Juanita listing as an alternative.
“The relative value and lifestyle opportunity was immediately apparent,” said Gray. “It’s our job to help international buyers explore all the opportunities. In past years, it had to be West Bellevue or Medina but now sales are occurring north into Kirkland and Juanita, east into Redmond and south into Mercer Island as well.”
Neighborhood profiles, economic trends, and editorial topics like potential changes in Trump’s policies on immigration, tourism, and foreign direct investment will be included in the next edition of Seattle Luxury Living magazine, set to publish late in Spring 2017. The first edition of 25,000 copies was launched in January 2016 and its success prompted an encore edition of 10,000 additional copies in September 2016. According to Jones, more than 70,000 downloads of the magazine have been viewed on their WeChat app so far. The most popular story of the year was the discussion about Vancouver’s recently imposed foreign buyer tax.
RSIR also syndicates all their listings, in Mandarin on Juwai.com – a leading property search site in China. Matthew Moore, Juwai’s president of the Americas, said Seattle is currently ranked the #1 most visited market online. A majority of Chinese buyers cited education as their primary motivator for interested in the market, followed by lifestyle, travel opportunities, and investment potential.
RSIR broker Robert Pong represented his Chinese buyer on the Prima Vista Estate. As a Founding Member of the Asia Services Group, he closely follows foreign buyer trends and considers the potential impact of the Trump presidency.
“My clients don’t seem too concerned with radical changes in the trajectory of investment or immigration into our region – they may even be more inclined while current policies permit it,” said Pong. “The more immediate concern is the continued devaluation of the Yuan against the US Dollar – Chinese investors continue to seek exchange hedge investments in residential real estate.”