Sales are down by almost a third as trade war makes Chinese cash less abundant
The ongoing trade dispute between the US and China has led to Beijing tightening the rules on its wealthy citizens moving capital abroad.
And that’s bad news for many North American housing markets including Los Angeles and Vancouver, where Chinese cash makes up a sizeable share of foreign buying power.
Los Angeles, for example, has seen a large decline in the condo market with 31% fewer sales in the third quarter compared to the same period of 2018.
Data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate reveals that around 50% of purchases in downtown LA in recent years have involved Chinese buyers.
With wealthy Chinese buyers favoring homes at the higher end of the market, it is LA condos priced above $800,000 that have seen the largest impact from the pull-back of cash; and at a time when construction of luxury condos has been increasing.
“New building prices are too high for what buyers think is valuable,” Stephen Kotler, who oversees the western region for Douglas Elliman told Bloomberg.
