The BC government has announced new rules that require purchasers to reveal citizenship details:
The new requirements, aimed at answering whether foreign ownership is driving up housing prices, go beyond the data that are supposed to be collected for Canada’s anti-money-laundering agency whenever someone is involved in a real estate transaction. Records show there is significant non-compliance among Vancouver-area real estate firms, which are required to collect the information for the Financial Transactions and Reports Analysis Centre (FinTRAC).
B.C. Finance Minister Mike de Jong said he is confident provincial auditors will be more successful. “The objective here is to get beyond the theory, get beyond the conjecture and the speculation and actually have hard data,” he told reporters on Tuesday.
They also announced new requirements to deal with bare trusts:
The new disclosure rules will also create new data on the use of bare trusts, after an investigative report in The Globe showed how such trusts may be used to transfer property ownership without paying the property transfer tax. Mr. de Jong said the data, which must be provided on the new property transfer tax return form, will be shared with Revenue Canada.
Such data are supposed to be collected under Canadian law, but a federal audit of paperwork in Vancouver realty offices found many instances where required filings were significantly lacking.
And of course the dreaded ‘shadow flipping‘:
The new regulation – which applies only to licensed realtors – will not ban contract assignment but seeks to ensure that the seller consents to such an arrangement and is the one who profits if the property is resold before the deal is closed.
So presumably the best way to continue shadow flipping is to avoid being a licensed realtor. Read the full article over at the Globe and Mail.
A recent report out of SFUs school of public policy is generating headlines that are rather extreme:
Foreign buyers crushing Vancouver home dreams as governments do little.
“People recognize what’s going on, and they’re willing to call a spade a spade,” he said, stressing that such views are based on reality, not racism.
His report compiles a number of other studies, including data on home-buying trends, population density, the cancelled immigrant investor program, and American research on the same issue.
Gordon said his report blames Vancouver’s housing crisis on foreign buyers, particularly from China, because “this is where the evidence points, not because of some anti-Chinese animus.”
Chinese investors have also spiked home prices in the Toronto region, but Vancouver has seen the highest rise in real estate due to the influx of foreign money reaching an unprecedented level in the last year, he said.
Gordon noted that other countries, including Australia and Singapore, have created policies for foreign homebuyers to protect their own citizens but that hasn’t happened in Canada.
Read the full article over at the CBC.
This is the day!
Time for our traditional Friday free-for-all post where we round up recent news and have our open topic discussion thread for the weekend.
Here are a few recent links to kick off the chat:
–If I can do it, you can do it
–Another Hollywood hater
–Vancouver stressful for millennials
–Why own and be in debt?
–All in for RE
–Cariboo deals with Vancouver invaders
So what are you seeing out there? Post your news links, thoughts and anecdotes below and have an excellent weekend!
Those of you who complain about the local real estate market should calm down and take a moment to reflect on the benefits of the current situation.
Without financial support from real estate developers how would the provincial government be able to provide necessities like salary top-ups for the premiere?
Without fundraising by condo marketers it would be you the taxpayer that would have to pay for that extra $300k given to the premiere since 2011.
And if you’re concerned about conflicts of interest, don’t be! The premiere herself has addressed this issue:
‘The issue for us is to make sure we always separate our public duties from any sources of funding for political parties, and I think that’s the most important thing for all of us to remember,” Clark has reportedly said in defense of the stipend. ”I always keep that utmost in my mind when we’re making decisions.”
If you want to read David Ebys concerns about the current situation, you can find them over at the Tyee but just remember, he’s likely motivated by sour grapes or jealousy. After all, Eby has been stuck with the MLA responsibilities for Vancouver Point Grey for the last few years while Clark gets to enjoy Kelowna.
Canada’s housing market is overheating.
Don’t worry, there’s no risk of a crash yet and further action by the federal government is expect to cool things down.
This according to Bank of America Merrill Lynch economist Emanuella Enenajor.
And, perhaps more importantly, she noted that “it’s different this time” because the Federal Reserve is in the midst of gradually raising interest rates.
“Economists and investors have become numb to signs of housing excess, as the sector has defied gravity for years,” Ms. Enenajor said.
“However, as the Fed gradually exits its accommodative policy, medium-term rates in Canada could also rise.”
This, she warned, heightens the threat of a correction in Canada’s housing market.
Read the full article over at the Globe and Mail.