With the recent implementation of the 15% property transfer tax on buyers from outside of Canada, foreign interest in Vancouver’s real estate market could be shifting to not only Toronto but also neighbouring Seattle.
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Data collected by Chinese international real estate website Juwai.com, provided to Daily Hive, suggests that shift with inquiries on Seattle and Toronto properties up 143.2% and 142.6%, respectively, throughout the month of August compared to the month one year earlier. In contrast, enquiries in Vancouver plummeted by 81% during the same period.
The provincial government’s property transfer tax surprised the real estate industry and investors and became effective immediately on August 2.
“There can be big variations in the data from month to month, so trends sometimes aren’t truly apparent until after six, 12 or even 18 months,” Matthew Moore, President of the Americas for Juwai.com, said in a statement. “Looking at a short period like this may not give us an accurate view of long-term trends.”
The real estate website also says that based on their data, Seattle is currently the top city in North America for Chinese buyer inquiries.
Earlier this week, TD Bank real estate economist Diana Petramala told Daily Hive last week that the shift in interest from Vancouver to Toronto began months ago, well before the property transfer tax was introduced. At this time, Toronto has replaced Vancouver as Canada’s most active real estate market.
Similar shifts in Chinese real estate interest also occurred in Australia recently after various state governments implemented taxes on foreign buyers. Interest from these buyers moved to Australian states without a tax and far afield markets such as New Zealand and Canada.
However, the Australian state level taxes were not a surprise and significantly lower at 3% and 4% for Queensland (Brisbane) and New South Wales (Sydney), respectively, and 7% in Victoria (Melbourne).