Real Estate

Vancouver housing bubble?

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  • Jul 19th, 2019 12:09 am
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Deal Expert
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Feb 9, 2003
17686 posts
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Langley
choclover wrote:
May 8th, 2019 2:06 pm
Political correctness including labelling people "climate change deniers" is driving this country to a place I never thought it could go.
Why are you labeling that as "Political Correctness?"

People who label things, including labeling things as "Political Correctness" are driving this country to a place I never thought it could go.
Deal Guru
Jan 27, 2006
10868 posts
4354 upvotes
Vancouver, BC
cbr600 wrote:
May 8th, 2019 11:23 am
because no one wants to be labelled a racist by simply pointing out the truth which is much of the money laundering in BC is foreign. So for the sake of political correctness, nothing gets investigated or done.
Of course this political correctness isn't a problem in foreign countries, just our own
I wouldn't say much of the money is foreign as we don't necessarily know the exact sources of all of the funds laundered. It's accurate to say that much of the media coverage has been centred around foreign funds. I suspect that a lot of domestic money also gets laundered through many of the same mechanisms reported on especially if it comes to payment for the import of illegal stuff.
Deal Addict
Dec 27, 2006
1927 posts
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Biggest scam


https://vancouversun.com/opinion/op-ed/ ... n-tax-scam

Samuel Hyman: Vancouver tax fairness should include end of 'community garden' tax scam
Samuel Hyman Updated: May 8, 2019

On April 29, three Non-Partisan Association councillors on Vancouver council, including Lisa Dominato, and three Green councillors voted to increase property taxes on homeowners for a third consecutive year.

Dominato said that she was informed by residents who value their small businesses. The tax shift provides needed relief to Vancouver’s small business community, who struggle to pay a disproportionately higher tax rate and share of municipal services than residential homeowners.

We are told this tax shift is about “fairness.” If so, before increasing homeowners’ property taxes yet again, how about scrapping Vancouver’s “community gardens” tax scam?

The “community gardens” scheme was initially proposed in 2008 by then-NPA councilor Peter Ladner. There were fears the real-estate meltdown in the U.S. might hit Vancouver’s market. If that were to pass, wealthy property owners and developers — you know, risk-taking speculators — could require property tax abatements to cushion their financial losses from market forces.

Here is how the program works. When a wealthy property owner shows the Vancouver tax assessor that the actual use of its land has changed — even temporarily — with the establishment of a “community garden” on the property, the value of the land doesn’t change, but the use classification does. For example, when a commercial or mixed-use property gets reclassified to be a park or garden, owners can get their property taxes to Vancouver cut by two-thirds — even more in cases where a property qualifies for “urban farm” status.


But the feared real-estate collapse didn’t happen. In the ensuing decade, land values increased exponentially. The NPA and Vision Vancouver took millions in campaign contributions from real-estate developers. Vision and developers pitched “community gardens” as an important component of affordable food security, particularly for the urban poor, within a broader green “plan” for the city.

“Plans” require details of timing and resource allocation to achieve objectives over time. Thirty-day notice clauses in agreements requiring gardens to be removed from a developer’s private property render such justifications for this program a fiction.

Too many unsightly vacant lots? Then impose minimum landscaping bylaws for lots left fallow for more than a year.

What Vancouver really has given multimillionaire, and even billionaire, property owners and developers is a market-timing and tax-reduction tool at the expense of everyone else.

“Community gardens” actually incentivize and subsidize wealthy developers to keep their lands fallow until it suits them. When developers restrict the supply of their land, they drive up prices. That’s Economics 101. Remember, these are the same people who told us that Vancouver’s affordability crisis was largely due to a short supply of land available for development.

In 2010, The Vancouver Sun reported that in 2009 the city gave more than $212,000 in tax abatements to Prima Properties’ community garden at Burrard and Davie Streets. In that same year, a garden on a parking lot next to the Astoria Hotel reportedly earned the Sahota family $132,000 in tax breaks. That was a decade ago. That is only two properties in 2009. In April 2017, a smaller gas station property across the street from the Burrard and Davie Street garden was valued at more than $36 million.

Ten years ago, then-Vancouver Courier columnist Alan Garr reported that the cost of each tomato plant grown in community gardens was about $500. That was before Vancouver property values sky-rocketed and the number of “community gardens” proliferated.

Many developers contract with gardening businesses — not the poor. A year-round produce voucher program would be more ethical and sustainable.

The tax revenue lost from “community gardens” on private lands is not sustainable and fails the most fundamental test of any scheme: fairness.

Samuel Hyman is a Vancouver lawyer.

Letters to the editor should be sent to sunletters@vancouversun.com. The editorial pages editor is Gordon Clark, who can be reached at gclark@postmedia.com.

CLICK HERE to report a typo.

Is there more to this story? We’d like to hear from you about this or any other stories you think we should know about. Email vantips@postmedia.com.
Deal Fanatic
Feb 29, 2008
7883 posts
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i6s1 wrote:
May 8th, 2019 2:17 pm
Why are you labeling that as "Political Correctness?"

People who label things, including labeling things as "Political Correctness" are driving this country to a place I never thought it could go.
Exactly.
Newbie
Mar 26, 2009
12 posts
9 upvotes
https://www.cbc.ca/news/canada/british- ... -1.5128769

CBC News • Province releasing 2 reports today into money laundering in real estate
Attorney General David Eby called the contents of the reports 'disturbing'

The province is set to release two reports into money laundering in B.C.'s real estate industry shortly after noon on Thursday.

One report is the remainder of former Mountie Peter German's report, while the second was written by criminal law expert Maureen Maloney.

Attorney General David Eby said Maloney's report was written with expertise from international experts and will make recommendations.

"It's a big picture report about policy in British Columbia and the potential impact of money laundering on B.C.'s real estate market," he said on Wednesday.

Eby will be discussing the report along with B.C.'s minister of finance, Carole James.

The latest reports come amid the release of a flurry of reports into money laundering in B.C., including an explosive report into the luxury car sector earlier this week.

"The trend around money laundering in British Columbia has been that when we look, we find disturbing information and I don't think these reports are any exception," said Eby.

"The reason we commissioned these reports was to get this information out to the public and I'm glad we've been able to do it as quickly as we have been."
Member
Jul 25, 2008
363 posts
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ottawa
https://www.cbc.ca/news/canada/british- ... -1.5128769
An estimated $5.3 billion worth of real estate transactions in B.C. last year were the result of money laundering, helping fuel the meteoric rise of housing prices in the province, according to a new report.

An expert panel on dirty money in the real-estate market estimates that five per cent of purchases in 2018 were made for laundering purposes, contributing to about a five per cent rise in home prices.

The effect could be more significant in certain markets, including Metro Vancouver, according to the panel.


Altogether, dirty money in the real estate market accounted for an estimated 72 per cent of the $7.4 billion that the experts believe was laundered in B.C. last year.
Newbie
Mar 26, 2009
12 posts
9 upvotes
https://news.gov.bc.ca/releases/2019FIN0051-000914

BC Gov News - Billions in money laundering increased B.C. housing prices, expert panel finds
More than $7 billion in dirty money was laundered in B.C. in 2018, hiking the cost of buying a home by about 5%, according to British Columbia’s Expert Panel on Money Laundering in Real Estate.
Read the Expert Panel on Money Laundering in Real Estate’s full report:
https://news.gov.bc.ca/files/Combatting ... Report.pdf

Read Peter German’s report:
https://news.gov.bc.ca/files/Dirty_Mone ... Part_2.pdf

See the Expert Panel on Money Laundering in Real Estate’s presentation:
https://news.gov.bc.ca/files/Combatting ... tation.pdf

See Peter German’s presentation:
https://news.gov.bc.ca/files/Dirty_Mone ... _Part2.pdf
Deal Fanatic
Feb 29, 2008
7883 posts
2987 upvotes
People are so easily influenced. Last year it was about rent controls and landlords.....now 2019 is about money laundering. What will happen when our government spends a crapload of tax payer money to stop all money laundering and home prices are still unaffordable. lazy government unable to address issues directly. Good luck Vancouver!
Deal Guru
Jan 27, 2006
10868 posts
4354 upvotes
Vancouver, BC
hugeinpants wrote:
May 9th, 2019 2:22 pm
https://www.cbc.ca/news/canada/british- ... -1.5128769

CBC News • Province releasing 2 reports today into money laundering in real estate
Attorney General David Eby called the contents of the reports 'disturbing'

The province is set to release two reports into money laundering in B.C.'s real estate industry shortly after noon on Thursday.

One report is the remainder of former Mountie Peter German's report, while the second was written by criminal law expert Maureen Maloney.

Attorney General David Eby said Maloney's report was written with expertise from international experts and will make recommendations.

"It's a big picture report about policy in British Columbia and the potential impact of money laundering on B.C.'s real estate market," he said on Wednesday.

Eby will be discussing the report along with B.C.'s minister of finance, Carole James.

The latest reports come amid the release of a flurry of reports into money laundering in B.C., including an explosive report into the luxury car sector earlier this week.

"The trend around money laundering in British Columbia has been that when we look, we find disturbing information and I don't think these reports are any exception," said Eby.

"The reason we commissioned these reports was to get this information out to the public and I'm glad we've been able to do it as quickly as we have been."
hugeinpants wrote:
May 9th, 2019 7:13 pm
https://news.gov.bc.ca/releases/2019FIN0051-000914

BC Gov News - Billions in money laundering increased B.C. housing prices, expert panel finds
Both of these sources are a bit thin on talking about the scope of the issue... they seem to say that it's a BC only problem...

The Vancovuer Sun article has a lot more depth - $5 billion laundered through B.C. real estate, inflating home prices: report
However, her report concluded $47 billion in money laundering occurred in Canada in 2018.

Of that, $7.4 billion was in B.C., making it only the fourth-highest in the country behind Ontario, Alberta and the Prairies.

And of that, $5.3 billion was in real estate, altering the market upwards by an estimated five per cent. Maloney’s report concedes it could be higher or lower depending on the type of property, and although it was not broken down by geographic region it could likely heavily impact the Lower Mainland and Whistler.

It is also more likely to affect single-family homes than condos in the Lower Mainland, according to the report.

“It is also not clear how much demand would fall if significant inroads were made into reducing money laundering,” read Maloney’s report.

“The housing affordability problem cannot be solved by reducing money laundering but reducing money laundering can certainly help,” Maloney wrote.
If anything, the entire report shows that BC isn't as bad as the media makes it out to be especially if you consider that Alberta and the Prairies have more money laundered and they have a much smaller population base as well as lower immigration numbers. Ontario is understandable as they have a higher population base with more economic activity so there should be more criminal activity there in an absolute term - ie not normalized over the population.

A little further down in the article, this nice bit of information -
“It is alarming to know that Greater Vancouver has also acted as a laundromat for foreign organized crime, including a Mexican cartel, Iranian and Mainland Chinese organized crime, all seeking a safe and effective locale in which to wash their proceeds of crime,” read the report written by German.
[OP]
Deal Fanatic
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Dec 3, 2004
5009 posts
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Vancouver
It's funny to look back at all the people who insisted that Vancouver RE prices were not influenced by foreign money or illicit funds. "Vancouver is just a really desirable place to live"...... "There's no more land"....... and comparisons to major cities like Toyko and New York and London. Once this cookie crumbles, Vancouver is just going to be regular old Vancouver again for a while and there will be no shortage of housing, guaranteed. Looking forward to it.
Deal Fanatic
Feb 29, 2008
7883 posts
2987 upvotes
adamtheman wrote:
May 9th, 2019 11:19 pm
It's funny to look back at all the people who insisted that Vancouver RE prices were not influenced by foreign money or illicit funds. "Vancouver is just a really desirable place to live"...... "There's no more land"....... and comparisons to major cities like Toyko and New York and London. Once this cookie crumbles, Vancouver is just going to be regular old Vancouver again for a while and there will be no shortage of housing, guaranteed. Looking forward to it.
Keep thinking home prices are a direct result of dirty money. People in today's age will take something and run with it. Let me know how affordable homes will be in 10 years. You think $5M homes will drop to $500K? Face With Tears Of Joy
Penalty Box
Mar 7, 2011
3462 posts
1605 upvotes
Vancouver
JayLove06 wrote:
May 10th, 2019 12:03 am
Keep thinking home prices are a direct result of dirty money. People in today's age will take something and run with it. Let me know how affordable homes will be in 10 years. You think $5M homes will drop to $500K? Face With Tears Of Joy
"Normal" people don't care about $5M homes, genius.
Deal Addict
Dec 27, 2006
1927 posts
902 upvotes
https://www.cbc.ca/amp/1.5128773?_

First month free: Landlords offering pretty perks to attract renters
Joel Ballard - CBC News
A Craigslist search reveals dozens of units with varied offers

Posted: May 09, 2019

Free moving expenses
One building in New Westminster is renting units with an offer to cover the cost of moving. (CBC News)
Landlords and property managers in Metro Vancouver are offering bonuses, such as a free month's rent, in an attempt to woo potential tenants.

A combination of sky-high prices and a low vacancy rate — currently sitting at one per cent — has long plagued those in the hunt for a new home, but, according to experts, the market is now on the precipice of change.

ADVERTISEMENT

"For the first time in six years, it's a tenant's market," said Moe Mousavi, a property manager at Macdonald Realty and the founder of DeluxeProperties.ca.

He says landlords are now being forced to offer incentives because there's more supply in the market than demand.

One of Mousavi's clients has a new building with 157 available rental units. He says each one includes incentives.

Moe Mousavi
DeluxeProperties.ca. founder Moe Mousavi says landlords are being forced to offer incentives in a bid to stay competitive as the rental market sees an increase in units. (Martin Diotte/CBC News)
On the front page of the Georgia Straight this week, a giant advertisement for The Westminster, a new apartment building in New Westminster, offers to cover the cost of packing up your old home and moving it into your brand new suite.

A few pages deeper, two more Vancouver properties, Peter Wall's Yaletown and Shannon Mews, advertise "rental incentives."

Vancouver's rental prices are falling, listings analysis suggests
A simple search on Craigslist brings up dozens of listings.

And it's not just developers offering bonuses. Mousavi says landlords with single units are also having to fight for tenants.

"A lot of these people are under pressure because of mortgages ... so it's, sort of, a desperate attempt to get their properties rented," he said.

Why the sudden increase in units?

Thomas Davidoff, associate professor at the UBC Sauder School of Business says we're seeing an increase in the rental market due to a combination of factors, including legislative measures by the province.

He says the empty homes tax and speculation tax, paired with the completion of many new apartment buildings are driving the supply.

"When you've got more listings than people looking, you're going to start to see some concessions," said Davidoff.

He says would-be tenants can now afford to play the field more, as compared to the last few years.

"People really felt that there was a gun to their head and if they didn't snap a place up instantly …that it would surely be gone," he said.

Still, Davidoff urges caution as pretty perks can often be accompanied by expensive leases.

Rental prices falling ... slowly

Rental units haven't seen the same fall in prices as the real-estate market, but Mousavi says there has been a slight shift.

'We need to transform housing politics': Treating homes as commodities has caused crisis, sociology prof says
And he expects it to grow over the coming year.

"Now, $2,300 is affordable for a one bedroom. I think next year … we're probably looking at $1,800 for a one bedroom."

A chance for renters to breathe, he says, after years in an unforgiving market.

CBC's Journalistic Standards and Practices
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Deal Fanatic
Feb 29, 2008
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charlesd79 wrote:
May 10th, 2019 12:10 am
"Normal" people don't care about $5M homes, genius.
Normal people will still struggle to afford homes, "genius". Good luck with your "do-over".
Deal Addict
Apr 10, 2011
1229 posts
726 upvotes
Vancouver
"$5 billion laundered through B.C. real estate, inflating home prices: report"
Vancouver Sun
May 9, 2019

Two new reports into money laundering shed light on how it distorts B.C.'s real estate sector, particularly in the Lower Mainland.

The cost of buying a home in B.C. increased by as much as five per cent last year due to more than $5 billion in dirty money from organized crime laundered through the province’s real estate sector, according to a new expert panel report.

Eby cited several examples of money laundering, including a self-declared “student” who bought 15 properties in the same Vancouver condo building in 2001 for $2.9 million. Those units are now worth $11 million.

A “homemaker” bought five luxury homes worth $21 million between 2014 and 2017, with one mortgage.

Another “homemaker” bought a dozen downtown town row houses for $4.1 million (now worth $15 million) between 2004 and 2007.

Another example was a Vancouver-area luxury car reseller known to police who is the principal owner of three homes with a value of $8.6 million purchased through three numbered companies and a mortgage lender with rates that decrease for each property.

.............................

"Peter German takes aim at toothless crime watchdog, hoping Ottawa has a fix"
Vancouver Sun
May 9, 2019

Canada’s official watchdog on the proceeds of crime is little more than a collector of information — and not a very effective one at that, according to money-laundering expert Peter German.

Fintrac is not a law enforcement body. In fact, law enforcement officers are not permitted to work in its premises due to charter of rights and privacy concerns.


https://vancouversun.com/opinion/column ... -has-a-fix

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