The following WSJ article complements my 11/9/17 post "NUMBERS COUNT AND CAN COST"
A Lucky Year for Chinese Real-Estate Buyers
By
Nancy Matsumoto
Jan.
25, 2018 10:21 a.m. ET
Chinese
will soon be celebrating the Year of the Dog. It could also be the Year of the
Deal.
It
has long been known in real-estate circles that an address or price that
includes the number eight—which when spoken in Cantonese sounds like the word
for “prosperity”—can make a property more popular with Chinese buyers. Now some
real-estate agents are reporting a reaction to the auspicious year of 2018: The
number 18, when spoken out loud in Cantonese, sounds like the phrase “I want to
be very wealthy,” says Kelly Xie, a Toronto-real estate agent for Century 21.
Janet
Wang, a real-estate agent with the Corcoran Group in New York City, says five
of her clients suddenly went from casual browsers to active property seekers.
“These clients have been looking for a while, then—I don’t know if it’s related
to 2018—but around December 23 or January 1, suddenly they say, ‘OK, this year
we’re really going to look.’”
Carrie
Law, chief executive of Juwai.com, a Chinese international real estate website,
says she knows of Beijing-based buyers who were ready to purchase a home in the
$5 million range in New York City last year, but postponed the purchase so they
could buy this year instead. “There may have been other factors at play, but
that’s the reason they gave us,” she says.
While
real estate veterans aren’t banking on a big 2018 bump, Christopher Wein,
president of the Toronto-based development company Great Gulf, says the number
2018 very well could spark “enhanced” market activity.
Besides
investing in a Shanghai office and equipping its sales sites with
Chinese-speaking staff and Chinese-language marketing material, Great Gulf pays
attention to lucky numbers. A pre-sale offering of 65% of the units at its
desirably located 8 Cumberland Street development sold out in a month, says Mr.
Wein.
Chinese
numerology has long been an important factor in certain real-estate markets.
While the number eight is always beneficial, the number four—which sounds like
the word for death—is to be avoided. In the greater Toronto city of Markham,
where nearly half the population self-identifies as Chinese, “sellers have to
put an eight in the price, and you try your hardest to avoid four,” explains
Anthony Tomasone, a real-estate agent with the online listing and referral
service Zoocasa.com.
From
January to May 2017, 66% of all Zoocasa’s Markham listings contained at least
one eight in the offer price, up from 25% in the first three months of 1990 and
35% in the first three months of 1995. In non-Asian-majority neighborhoods in
the U.S., eight was the last nonzero digit in just 4% of all home listings in
2017, according to data from Trulia, while in Asian-majority neighborhoods the
figure was 25%—up 5% from 2012. Among listings for homes over a million
dollars, that number in Asian-majority neighborhoods is 38%.
In
New York, Chinese buyers flock to the condo development at 80 Park Avenue
between 38th (an especially auspicious number that sounds like “create wealth”)
and 39th, says Geovanna Lim, president of the real-estate investment and brokerage
firm Park Avenue International Partners.
Some
would-be buyers will lobby for a change in house or unit numbers. Seattle
Berkshire Hathaway real-estate agent Becco Zou recalls the buyer who liked
everything about a $3 million home except for its address: 1044. “He went to
the city of Bellevue and got it changed within a day,” she recalls. Tracy An, a
sales representative for Sotheby’s in Toronto, says one of her clients, with a
neighbor’s consent, was able to change his house address from 44 to 42A.
In
New York, Chinese buyers flock to this development at 80 Park Avenue. Not only
does its address include the lucky number eight, the building is located
between 38th (an especially auspicious number) and 39th streets.
In
New York, Chinese buyers flock to this development at 80 Park Avenue. Not only
does its address include the lucky number eight, the building is located
between 38th (an especially auspicious number) and 39th streets. The Chinese
preference for certain lucky numbers has become so well known that even
non-Chinese buyers are careful to pay them heed, says Peter Ng, Calgary-based
president of multicultural real estate specialist KORE Marketing. In Richmond
or Burnaby, British Columbia, he says, where 80% to 90% of pre-sale condo units
are snapped up by Chinese buyers, non-Chinese are loath to buy a numerally
challenged unit; in a few years, they might find it impossible to sell.
Most
experts note that fundamentals still matter the most. Chinese buyers consider
factors like interest rates, potential tax law changes, China’s crackdown on
the outflow of capital for foreign real-estate investment and, in Canada, a
federally mandated stress test designed to raise the financial bar for mortgage
seekers.
Coco
Tan, a Silicon Valley real-estate agent, projects continued market momentum
carrying over from a strong 2017, noting that “uncertainty coming up with tax
reform” and a possible interest-rate increase are spurring buyers to strike
deals sooner rather than later in the year. The biggest reason for strong
sales, she adds, is lack of inventory, a situation replicated in Canada. Still,
property values “are already pushed really high,” says Ms. Tan, raising the
possibility of a correction. She adds, “It’s going to be an interesting year.”
Ms.
Law of Juwai.com thinks otherwise. She predicts a big upsurge in activity in
August—because it is 8/18.
“You
will likely see buyers and agents scheduling viewings and closings for the
eight day of the eighth month of 2018,” and others scrambling to close year-end
transactions quickly, “before the calendar ticks over from 2018 to 2019,” she
says.e real-estate agents are reporting a positive reaction to the auspicious
year of 2018.
