Searches for Metro Vancouver homes on China’s largest foreign property real estate portal plunged the day the B.C. government introduced a controversial 15% tax on foreign homebuyers.
“The 25th of July was the day the B.C. government announced the tax, and it was also the day juwai.com had the lowest number of buyer inquiries for Canadian property in nearly two weeks,” said Matthew Moore, president of the Americas for Juwai.com.
Inquiries about Metro Vancouver homes priced at $1 million or more have continued to fall, dropping 55.6% in August compared with a month earlier, Moore said. Inquiries about Vancouver-area homes priced at $1 million or less dropped 8.3% in the same period.
Last week, juwai.com had 30 pages of Metro Vancouver homes for sale – at least 300 properties – ranging from $650,000 North Vancouver condominiums to a five-bedroom house in Shaughnessy listed for $10.8 million.
Byron Burley, juwai.com’s Shanghai-based vice-president, told a real estate conference in Vancouver in June that the Chinese-language site normally has approximately 3,000 residential listings from B.C.
“There has been a demonstrable pull back in Chinese demand in Vancouver,” Moore said, adding that the “inquiry fall has been much greater for luxury properties.”
Moore cautioned that it’s too early to say a trend is developing.
“Vancouver inquiries have been very volatile, with big monthly variations in the past. So looking at a short period like this may not give us an accurate view of long-term trends.”
But juwai.com tracking shows that Chinese buyers looking for foreign property had begun shifting away from Vancouver even before the tax came into effect.
“The shift to other cities has been going on for months, with buyer demand momentum shifting to other cities with similar appeal but lower entry prices,” Moore said.
“Right now, Seattle is the No. 1 city in North America for Chinese buyer inquiries, even displacing Los Angeles.”
He added that here has also been an uptick in Chinese buyers searches for homes in Toronto, Calgary and Ottawa.
“We’re in a period of uncertainty that could go either toward a demand slump in Vancouver or toward a renewal of demand as the uncertainty subsides. It’s too soon to tell just what will happen in the long run.”
B.C.’s new foreign buyer tax, which came into effect on August 2 and is applied only in Metro Vancouver, is linked to a 71% drop in detached housing sales during the first two weeks of August compared with the same period a year earlier.
“Right now, local deals are being nixed, detached sales have plummeted and foreign buyers are moving on to other cities,” said Neil Hamilton, a senior property adviser with Macdonald Realty Ltd. in Vancouver.
But, like many other agents contacted, Hamilton said the market could recover quickly once the shock of the foreign tax wanes.