Seattle remains one of the most sought after U.S. west coast markets for Chinese real estate buyers in 2016 and 2017 due to a recent foreign investment tax in Vancouver.
For the second half of 2016 and continuing well into this year, Seattle has become one of the top markets for Chinese real estate buyers. Many are preferring the city over nearby Vancouver, a rapid reversal of the prior purchasing trend.
After a 15% tax on foreign real estate investment was enacted in Vancouver in August of 2016, Chinese real estate investors began searching for properties in Seattle at a significantly higher rate in the following months, while searches for Vancouver properties began declining. The tax applied to anyone who was not a permanent resident or citizen of Canada who purchased a home in the Vancouver metropolitan area.
Seattle became a preferred alternative to Vancouver because of its similar location along with several other distinct features that Chinese buyers have been seeking. The 15% foreign investment tax was in addition to a 1% tax levied on empty properties.
Pursuing the top luxury properties in Seattle
According to local real estate experts, Chinese real estate buyers are primarily interested in luxury and higher-end properties at a price point of $1.25 million or higher in the Seattle area.
In Seattle, Chinese buyers represented under 25% of total buyers in 2014. In 2015, the number went up to 35% and in 2016 it went up to about 50% or more for the most popular neighborhoods in Seattle. By the end of 2016, the CBC reported that about half of the luxury homes in Seattle and Bellevue areas were sold to Chinese and other foreign buyers.
There was also a spike in Seattle real estate purchases in 2014 after Canada had reversed 60,000 visas for Chinese resident applications, while the former Obama administration had increased the length of the visa program for Chinese students and nationals.
Seattle offers many attractive features
Like some of the other preferred West Coast markets, Seattle offers several attractive features such as a large Chinese population, relative affordability compared to other major metropolitan areas, low crime rates, and an excellent school system.
The state of Washington has the added benefit of no state income tax compared to California. Seattle also became popular as the result of one of China’s most successful movies of all time, the 2013 hit Beijing Meets Seattle, which is credited with boosting both tourism to Seattle and real estate sales.
Seattle remains one of the more affordable West Coast cities
Seattle has also seen a rapid rise in purchases from U.S. transplants who are moving from more expensive West Coast cities such as Los Angeles and San Francisco in order to find more affordable real estate in a similar tech market. Although demand has risen from multiple sources, Seattle remains one of the more affordable large West Coast cities.
The recent increase in property demand has also resulted in several new homes being constructed. Developers are now starting to learn Mandarin Chinese and are constructing homes to cater to the needs of Chinese real estate buyers, including homes with private suites for visiting family members and second kitchens.