Call for inquiry on Vancouver home contract flipping

The Globe and Mail recently published a story on contract flipping in Vancouver:

The probe reveals that homes are being flipped by assigning – selling – sales contracts before closing, for higher prices than what the original seller homeowner receives in the end. Assigning contracts like this is legal, but controversial.

Speculators who profit this way also don’t pay property transfer taxes, because technically the property doesn’t change hands until the deal closes.

Mr. Eby said he is hearing from upset constituents in his Point Grey riding, where many homes are demolished to make way for new investor-owned houses that sit empty, some resold several times.

There have been a number of reactions to this story, but most recently calls for an inquiry:

The technique, which brings profits for speculators but higher prices for buyers, has sparked a torrent of criticism in the province “The investigation needs to be independent because the government has already said it doesn’t think there is a problem,” said MLA David Eby.

Vancouver Mayor Gregor Robertson said after Saturday’s report that the province should impose a tax on speculators.

Read the full article here.

BC Premier Christy Clark has already said no to the province making any extra money off of sales to offshore buyers, but says now there will be a study on the impact of foreign buyers.  The government also proposes to raise the PTT exemption as a way to solve high housing costs without risking lower house prices for first time buyers.

It’s worth highlighting this comment from ‘shut it down already‘ who points out that this summary confuses the issue of offshore buyers and contract flipping which has the ‘racists running in circles’:

Rampant speculation generally resolves itself in the end. The other obvious contradiction is that we often hear people here saying that government intervention in the markets is the problem, yet now you want them to step in and intervene.

Don’t forget that the original sellers of an assigned property accepted a price that they were satisfied with. It’s only greed and jealousy that had them aghast that the buyer might resell for more than they paid.

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Whistler or bust?
Guest
Whistler or bust?
I wrote a letter to the Premier expressing my concern about the affect of foreign buying on our market and (gasp) she wrote me back. She wrote me back! :):):):) Thank you, Mr. _______ for your email. We appreciate the time you have taken to write. We want to take this opportunity to assure you that our government is committed to our efforts to grow and strengthen the economy, and we recognize keeping housing affordable for British Columbians is essential to these efforts. The rising cost of housing, especially in the Metro Vancouver area, is of deep concern and we want to work with the city to address this challenge. We understand the concern regarding foreign ownership and you may be interested to know that staff in our Finance ministry are engaging in discussions with regulatory organizations responsible for overseeing… Read more »
paulb
Member

Holy listings!

New
434
Sold
193
TI: 7,908

http://www.paulboenisch.com

Vanco
Guest
Vanco

Things I have learned from VCI:

1) the market can remain irrational longer than your ability to purchase a home.
2) some people who are wrong will dig in their heels and be more convinced of themselves.
3) some people get really angry when they get priced out
4) you shouldn’t confuse primary residence with investment property

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

remember when the bears were getting all hot and bothered about the teranet chart? i haven’t heard that chart mentioned in a long time. how’s it doing? patriotz, u like stats. can u update us?

crabman 2 years 8 months ago
Return of the bull market?! Check out the Vancouver Teranet chart. The spring rally usually lasts well into summer. This year’s rally is already over – the worst since at least 2001. Great ready for a really bearish 2013!

http://www.housepriceindex.ca/Default.aspx

Shut It Down Already
Guest
Shut It Down Already

There are lots of charts that get ignored these days. Almost all of them, in fact. How’s that bond yield spike looking, I wonder?

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

looking at that chart, am i the only one who thinks it looks like it’s going to go parabolic?

Funkeymonkey
Member
Funkeymonkey

Rents are directly tied to wages! So rents cannot go up in price like RE.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

not when you have working people being outbid by wealthy chinese students.

Funkeymonkey
Member
Funkeymonkey

I thought wealthy Chinese students only bought RE not rent it.
Space maybe so but there is a peak for rents unlike RE.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

then you haven’t been reading my posts.

space889
Member
space889

Maybe not but it has certainly gone up faster than inflation or wage growth for non-bear renters in GRVD.

Many Franks
Member
Active Member
Oacle
Guest
Oacle

No personal offence to the Bears on this blog but a majority are just dumb.

Most just pick up and adamantly follow on stories MSM puts out to deflect the real reasons.

Repeat after me dumb bears: immigration and illegal money inflows. Maybe too schooled to believe otherwise.

Best place on meth
Member
Best place on meth
Best place on meth
Member
Best place on meth

This morning CBC Radio was all over this issue of contract flipping, they interviewed Dermod Travis of Integrity BC, a watchdog organization.
He suggested that there was criminal activity at play, that the police should investigate and that it’s a joke that the Real Estate Council of BC has been appointed by the BC Libs to look into the matter – in other words, the real estate industry policing themselves which is inherently corrupt.
He correctly points out that members of this council are appointed by the Libs and are big donors to the Libs.
So we have a corrupt government turning the investigation over to the corrupt real estate cartel which will no doubt issue a few wrist slaps before sweeping the whole matter under the carpet.

Begins at 2:31

http://www.cbc.ca/news/canada/british-columbia/programs/theearlyedition/february-9-2016-1.3440320

southseacompany
Member
southseacompany

“ANALYSIS: In a global economy adrift, leaders don’t know where to take us next: Don Pittis”, CBC News

http://www.cbc.ca/news/business/global-economy-solutions-1.3435453

“Medicine on offer includes negative interest rates and helicopter money, but the patient is not responding”

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

we are going to start see condos and townhouses go up in price.

COCs have been priced out of the city of vancouver for sometime. more recently they have been priced out of the inner suburbs.

rents in the city of vancouver for condos and townhouses have skyrocketed.

for the first time ever, it’s my opinion that centrally located condos and townhouses are a good investment.

elvince
Guest
elvince

Are you gonna buy one?

Zero Down Forty
Guest
Zero Down Forty

“Poloz passes the economic policy buck to Morneau”
http://business.financialpost.com/fp-comment/terence-corcoran-poloz-passes-the-fiscal-policy-buck-to-morneau

Monetary policy lowers interest rates as govts buy bonds. Fiscal policy raises interest rates as govts sell bonds.

Not so good a time to invest in an asset who’s price is influenced by interest rates.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

Mark Zuckerberg Wishes Happy Lunar New Year in Chinese

https://www.youtube.com/watch?v=Yo9bArhBGSU

fosolo1
Member
fosolo1

Question :
Does anyone know whether assignment sales are counted as a sale by the Real Estate board. For example New Coast Realty knocks on mom and pop’s door and says I have firm buyer and then proceeds to flip (assign) twice more before the deal closes.. My question is whether this is counted as 1 sale or 3 sales.
I have never been able to reconcile how we have near record sales month after month with inventory near multi -year lows. The only way it makes sense is if assignment sales are added into sales stats.

Zero Down Forty
Guest
Zero Down Forty

There is only one “Contract of Purchase and Sale. That contract just happens to be assigned to someone else, but it is still the same ‘sale’.

http://www.recbc.ca/psm/assignment-of-contracts/

patriotz
Member

It makes sense if DOM is very low. If 100 properties are listed every day, 100 properties sell every day, and it only takes one day to sell each one, you’ll get 3000+ sales a month with no more than 100 inventory. Of course the listing and sales flow is more random than this but you get the idea.

My understanding of REBGV stats is that they are for MLS listings.

bullwhip29
Guest
bullwhip29
haven’t posted in a while… . wouldn’t it be ironic if the very same realtors who have maintained that this market is robust, healthy and fundamentally solid are the very same ones that result in the demise (at least in the short to med term) of what appears to be nothing more than a rigged, shady, over the counter style shell game reminiscent of the shenanigans we witnessed during the VSE golden yrs . on the subject of the financial mkts…it really is very curious how “something” appeared to snap on Jan 4 (the first trading day of yr) and ever since things have been a sloppy, chaotic mess at the best of times. in a nutshell, the fact that reckless buyers are still out there taking wild swings in the hopes janet yellen or whoever will “save the day”… Read more »
Oracle
Guest
Oracle

Only 1 solution left.

A anti immigration political party is badly needed in this country to balance the forces.

space889
Member
space889

Also, half of all those real estate get rich programs involved finding people who are in financial distress, going privately to them to buy their house with “cash” to help them resolve their money problems. Except the program teaches you to use their own custom made purchase made contract with a resell clause, and a back out clause that says buyers can’t void the sales contract if no 2nd buyer is found within xx days. So, this is a risk free way for you to spec in housing and “help” people.

I found this kind of RE investing program to be quite morally repungent. However, the promoters and teachers are all full on American Caucasians, so I guess that must mean it is ok, right? Westerners would never ever promote anything that’s morally wrong and unethical.

space889
Member
space889
Condo contract assignment was all the rage pre-2008 until the developers got smart and demanded a 20% and/or $5000 fee. They also were pretty aggressive suing people in 2008 when the original buyers or the people who bought the assignment didn’t complete the contract. I believe even former PM Kim Campbell was named in one of the lawsuits. Nobody in the general public or on this blog were crying foul about contract assignments back then? But when some Chinese investors do it with the cherished SFH, it is suddenly an outrage?? Because the sellers didn’t get much as they could have if they simply sold later? There are only 2 real issues here and none of them have to do with race or foreign money. 1 – Did the realtor act in the best interests of seller they claim to… Read more »
Yunak
Member
Yunak

Stubborn idiot took his mission very seriously and keeps fudging votes although posts don’t get hidden. Sick brain must be one?

Tiger
Guest
Tiger

CHINESE COMPANY’S EMPLOYEES CAN PICK ‘NIGHT WITH A PORN STAR’ AS A BONUS

http://www.mandatory.com/2015/02/06/chinese-companys-employees-can-pick-night-with-a-porn-star-as/

space889
Member
space889

Porshe, 1 week in Bali, or 1 night with Japanes AV Idol….

or if you are smart as one commentor – take the porshe, sell it, spend 6 months in Bali and get the AV idol while she’s on vacation.

Meanwhile in Canada, lots of employees can look forward to a big fat $0 year end bonus, and a 1.5% raise that’s already hand back to the gov’t.

Whistler or bust?
Guest
Whistler or bust?
This from the comment section of the Globe and Mail So the BC Government is feeling the heat. So there is a rapidly developing hyper inflating Real estate price bubble expanding to crisis proportions over the last 10-15 years destroying the community and culture of Vancouver and the only thing the BC Government decides to do is create a secret, behind closed doors ‘independent’ committee to investigate for 12-18 months and then what???? Shuffle the finding behind an election campaign??? This smokescreen commitee is NOT making any concrete suggestions on the main sources of this crisis. The main issues involved once again that the BC Government is NOT addressing: unrestricted numbers of 10 year multi entry visas given to wealthy offshore elite to speculate and buy Canadian property, giving the same property rights to wealthy offshore non-residents WITHOUT any of… Read more »
GreenSalad
Guest
GreenSalad

Global Housing Market: Price Crash Led by Major Cities And Rapid Exit Of Investors
So over-stretched are they in Vancouver it is estimated that a normal price correction of 20 per cent would completely wipe out ten per cent of homeowners. Not surprising as house prices there are by some estimates now 30 per cent overvalued.

http://www.globalresearch.ca/global-housing-market-price-crash-led-by-major-cities-and-rapid-exit-of-investors/5503743

Zero Down Forty
Guest
Zero Down Forty

“The fault lies directly in the lap of central banks as quantitative easing caused an enormous injection of cash into economies, forcing interest rates to fall the their lowest levels in history. This knee-jerk over-reaction effectively halted price corrections that should have fully unfolded but didn’t and put rocket boosters under house price inflation the world over.”

Bingo. We know that history all too well here in Vancouver.

YLTNboomerang
Member