> Yan says there may be some solution—a mix of remedies, new laws, purpose-built rental housing, tax adjustments and so on—that does not mean a collapse in Metro Vancouver’s real estate prices.
There never will be a solution because no one will vote for a government that will bring down the value of their home.
It is frustrating as there are straightforward, cost-effective approaches the government could take to better understand the problem and they have chosen not to pursue in an expedited fashion either because of lack of effort or an active desire to stay ignorant (due to upcoming election, impact on big donors, etc...). Instead they just keep telling Canadians they will "allocate funds to better research the issue", i.e. kick the can.
For example, a simple, 80/20 analysis they could perform: list at all real estate held by holding companies in GVA and GTA and generate a list of their corporate directors. Find people who are directors on a large number of those holding companies, and check if they are related somehow to law firms, banks/wealth managers, Real estate agents or immigration businesses. If so, you now have a short list of potential properties being used for money laundering that maybe merit further investigation.
Calling the top 25 people on that list should reveal some interesting findings... Re-organize by property value if you want to catch bigger fish first.
This was not a surprise exposure to anyone. Vancouver is a peculiar place, where mobsters haul around duffel bags full of cash and various authorities pretend everything is fine.
Lately gossip has mostly focused on the motivations of the various auditors and authorities, who refuse to do their jobs. Leading theories include fear of racism accusations, corruption, laziness, and of course gross incompetence.
The mess has spread from Vancouver to Toronto and is now hitting Montreal hard as well.
Article is from February 2018.
Real estate remains one of last few asset classes where ownership can be obfuscated reliably. This makes it ideal to park money of dubious provenance. If you bring transparency to the system - much like know-your-customer did to banking - this phenomenon will largely disappear. The local residents have reached a point I think for this to happen in Vancouver - and it could spread to other similar cities.
What I find most interesting about the influx of Chinese money is that many Chinese communities across North America were built by people who fled China and its communist regime. One can argue that the beginning of the current Vancouver housing boom was the Hong Kong transfer in 1997. And they built tight-knit communities in Vancouver/Richmond area (not mention some of the best Chinese restaurants in the world).
Now just one or two generations removed, these communities are facing the consequences of the same communist regime they thought they left behind.
(2018) - this does not provide a complete picture of the current state of the market.
I wish they just did not sell to foreign investors. And yes I would be fine if other countries did the same, why do I need to own a place in 'x' country? This is, again, capitalism at the expense of the people who actually live in the region. I am not against immigration and owning property but a person or organization who are simply buying up property just to make a profit and have no intention of ever living there should be stopped. Or at the least heavily taxed to discourage the practice.
There are a handful of vibrant cities in the world that haven't been given over to freeways and parking, and they're so rare and desirable that they've become luxury goods that are speculated on, like they're paintings by Vincent van Gogh. How sad is it that so far it's been impossible to simply make more nice places for people instead of for cars?