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.
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.
The real estate mojo of lucky numbers, however, doesn’t seem to extend to Chinese zodiac signs. The coming Year of the Dog, which begins Feb. 16, isn’t a significant factor to most buyers.
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.
Read it at The Wall Street Journal
Appeared in the January 26, 2018, print edition as 'a lucky Year for Chinese Buyers.'