Dozens of homes in Metro Vancouver bought in the last two years are currently listed to be sold for a loss as speculators appear to exit Canada’s hottest real estate market.
Looking to launder some money?
You’d be hard pressed to find a better place to do it than right here in beautiful British Columbia.
“One of the members of the public service said, ‘Get ready. I think we are going to blow your mind.’ While I cannot share all of the details, I can advise you that the briefing outlined for me allegations of serious, large-scale, transnational laundering of the proceeds of crime in British Columbia casinos,” Eby said. “And I was advised that the particular style of money laundering in B.C. related to B.C. casinos is being called, quote, ‘the Vancouver model’ in at least one international intelligence community.”
Eby suggested that a “lax attitude” towards regulation of B.C. casinos, during a period when the previous government had enjoyed “massive increases in provincial gambling revenue,” seems to have contributed to the problems today in B.C.’s gambling system.
Once you’ve had fun in our casinos come join the real fun in our property market where owners get to hide behind ‘opaque legal mechanisms’ for a place to stash cash that pays back!
Eby also said that he believes B.C.’s property ownership system — in which true owners of property can hide behind opaque legal mechanisms — could be attracting foreign criminals and corrupt officials seeking to hide wealth in the province. Eby said Finance Minister Carole James is working on reforms to pull back legal veils that cover true ownership of property and corporations.
Eby pointed to a 2016 study by Transparency International that showed real estate buyers in B.C. are using shell companies, trusts and nominee buyers to hide their beneficial interest in property.
In examining Vancouver’s 100 most valuable homes, the report found that 46 per cent — amounting to more than $1 billion in assets — have opaque ownership. Of the 100 properties, 29 are held through shell companies, at least 11 are owned through nominees (listed as students or housewives on land titles), and at least six are disclosed as being held in trust for anonymous beneficiaries, the report said.
Eby said B.C.’s landownership system could be connected to Metro Vancouver’s skyrocketing home prices. Top economists have “made inescapable arguments that taxable incomes reported to Revenue Canada have no connection to real estate values in Metro Vancouver until you get out to the distant suburbs of Vancouver,” Eby said.
This Eby guy sounds like a troublemaker. You know what to do, get out your wallet . With the right motivation we should be able to get this new government on the right side of history and keep the fun going in the casinos and the housing market. Right?
Read the full article here.
The Mayor is said to be drafting a motion that will give local buyers first chance to buy
Mayor Gregor Robertson will introduce a motion to give local residents first crack at pre-sale condo sales Tuesday during a Vancouver city council meeting.
The motion asks city staff to draft a policy framework as part of the city’s “Housing Reset” plan.
Critics of the real estate industry have raised concerns about how the increasingly speculative pre-sale market is pushing up prices in both the pre-sale and resale market, and is preventing local residents from buying.
Presumably this will help to end the homeless problem in Vancouver by giving locals easier access to condo presales.
Read the full article here.
“Finance Minister Bill Morneau says last October’s sweeping mortgage rule changes aimed at cooling Canada’s housing market have successfully dampened high-risk borrowing.”
“But despite a report urging Ottawa to look at ways of boosting support for Canadians entering the housing market, the Minister ruled out any new measures along those lines, expressing concern that such an approach would encourage higher house prices.”
Read the full article over at the Globe and Mail.
This is just kind of sad if it’s true, an analyst says that the associated fees for buying and selling real estate (commissions, taxes, legal costs and fees) make up a stunning 1.9% of GDP.
That’s more than agriculture, fishing, forestry and hunting combined.
Doyle points out that the U.S. was relying big time on home ownership transfer fees in 2005, when its real estate market peaked. But even then, those fees made up only about 1.5 per cent of U.S. GDP. Now, years after the U.S. housing market crash, transfer fees make up less than one per cent.
In Canada, upcoming data will likely show those fees have already started to fall, as the number of home sales across the country fell in June by the most in seven years.
Doyle says Canada’s increased reliance on real estate fees can be blamed on years of ultra-low interest rates, worsened during the oil price slump when the Bank of Canada cut rates even further.
“I think they felt that the lesser of two evils in that situation was to cut interest rates,” Doyle said.
But that fix has helped put Canada in another tricky situation, where the economy relies to an unusual extent on home transactions. That could have particularly negative consequences as the central bank begins to raise rates again.
“The drag on the economy that’s going to flow from [higher rates], I think, will prove to be much more severe than it’s been in the past,” Doyle said.
Read the full article here.