Real estate sales to Chinese buyers in Vancouver are in the midst of a "no growth" pattern, according to data gathered by China's largest real estate portal, Juwai.com.
"Chinese buyer demand in Vancouver is flat as a pancake — neither up nor down," said Byron Burley, vice president for Juwai.com in B.C.
The most common searches on Juwai in addition to Vancouver were Toronto, Seattle, Montreal and Los Angeles. Inquiries from buyers in China for all international properties are up 8.7 per cent over last year.
Buyers compare prices elsewhere
"When these uncommitted buyers compare Vancouver prices, plus the tax, to what they can get somewhere else, sometimes they decide it's not worth it," Burley said.
In August 2016, the province introduced a 15-per-cent tax on foreign homebuyers in Metro Vancouver in response to the region's skyrocketing housing prices.
"The power of the Vancouver tax lies in the fact that about 50 per cent of our Chinese buyers begin property hunting without having made up their mind about which city they want to purchase in'" said Burley.
Foreign buyers overlooking Vancouver
Last week, chief economist Matthew Gardner with Windermere Real Estate in Seattle said foreign buyers were overlooking Vancouver and heading to Seattle at a "frenetic" pace.
"A lot of people who were looking in Vancouver are automatically looking further south now to Seattle," said Gardner. "[There's] no question there's a knock-on effect given your tax situation relative to foreign buyers. … Frenetic is the best way to put it."
After years of dire warnings about an impending real estate bubble bursting, does the levelling off mean single-family home prices will cool down?
"I think that correction would take the form of a slower market for a number of years and very flat prices," said Tsur Somerville, a professor at UBC's Sauder School of Business. "It's really hard to see the trigger for large price corrections in that market."
Somerville said his bigger concern lies in the surging sale prices for condos and townhouses in what he described as a "split personality" market.
"Having condo prices rise almost 40 per cent in one year isn't salvation — that creates lots of affordability problems," he said.
"We were relying on condos and townhouses to be the source of affordability, and if those are going through the roof that's taking the affordable option away."
Juwai's Burley said Vancouverites shouldn't expect the levelling off of demand from China to have major consequences.
"It's very important to remember, however, that Vancouver is more like a pancake than a deflating soufflé, he said. "Buyer demand has not collapsed, it's merely flat."