Chinese Investors Driving Up Metro Housing Prices

[Stingray2004]

Originally Posted by casper

Honestly, all the article points to is that some agents of doing a bad job of record keeping. They are suppose to "know their clients" by copying down the driver license or passport number of the client onto a form and they either did not do it or don't have the form.

I have to say I shocked there are "12,400 agents " in metro Vancouver. Good that is a lot of people making there living by entering data into MLS software and walking clients through homes. Ok, they probably do a bit more negotiating the deal for you.

Most business transactions are traceable. Company A writes a cheque or wire transfers to company B. Real-estate goes through lawyers with lawyer trust accounts. I would be more concerned with those than the real estate agents.

Bingo! At least ya have a logical/reasonable analysis on this matter. But I will even go further than that.

I get the impression by some here that folk from China apparently are walking up to a realtor with a suitcase full of cash, make an offer to purchase, have a subsequent binding contract of purchase and sale, and the "laundered cash" exchanges hands. Just speculation and conjecture.

Doesn't work that way. Firstly, even if someone from China, for example, approaches a realtor to purchase a residence, successfully has a conditional contract of purchase and sale... said deposit for same must be made payable to the relevant real estate firm in trust. That deposit is placed by the real estate firm's accountant into the real estate firm's trust account. If it's "cash" in excess of $10,000.... both the real estate firm as well as the receiving financial institution MUST disclose same to FINTRAC. Period. AND they will.

Obvious that no one makes a down-payment with "cash" these days. And another problem also arises thereafter... both the purchaser and vendor require a lawyer/notary in order to transfer/convey title - and that involves cheques into said lawyer's trust accounts. These days $millions involved in such a singular transaction and no one is gonna go to a lawyer, in order to transfer title, with suitcases of $100 bills as some here apparently speculate.

Hell, that's just another safeguard as said lawyers also are required to disclose to FINTRAC any cash received in excess of $10,000. And they will.

So how does one ascertain "money laundering" through this whole cycle of real estate trust accounts/their financial institutions as well as real estate lawyers/notaries and their trust accounts/financial institutions?

Ya can't. Simple.

-----------------------------------------------------------------------

OK. After the foregoing synopsis, I will now provide some first-hand evidence/a "front row seat" on ACTUAL money-laundering involving Metro Van real estate involving ~$100 million in funds.

To preface, about a decade ago, the Vancouver Sun wrote a series of articles on the conviction/sentencing of a MAJOR drug-lord kingpin in western Canada/BC. Now keep that in mind in terms of the following:

Around that same time, a residential builder purchased a vacant lot next to my residence in order to build for his own personal residence. Naturally, I befriended the guy as he was building his residence - my new next door neighbour so to speak. Concurrently, this guy was also building numerous/literally tens of new $multi-million dollar homes in both Richmond and the west side of Van City. Cool I thought back then.

Thereafter, numerous "red flags" came to my attention concerning my new next door neighbour... esp. the "loose lips sinks ships" kind. So much so that I contacted a high-school pal ... a then VPD officer... requesting her to check out something on the police data platform on my behalf. Then and there... after she conveyed me the info... I had no doubt that the convicted drug kingpin was somehow involved in the next door residence fer chrise sakes.

Thereafter, I even doubted myself as a "conspiracy theorist" and was somehow "over-thinking". Have never had this same inkling before or thereafter.

Lo and behold, one summer-like June day.... I was having a late breakfast... around 8 am. All my windows and sliding doors were open and I also noticed a landscaping crew putting the finishing touches next door ... inclusive of many exotic plants.

Next thing that I heard were loud voices outside, which obviously startled me. So took another look outside... (could only see neighbouring side yard/back yard) and saw numerous plainclothes folks - overheard one fella tell a gardener "RCMP... ya no longer work here. Go home".

"Twas quite apparent that I was witnessing an RCMP raid confirming my previous strong suspicions, which were ultimately confirmed. A few weeks later I received a call from a guy in the RCMP Commercial Crime Section requesting a meeting. When both showed up at my front door, the RCMP CS guy was well-groomed/clean-cut but the Narcotics RCMP section fella looked like he would fit right into Van City's DTES. Both were super nice guys and down to earth though.

After a couple of hours we both exchanged info and the sophisticated drug lord's ~$100 million money laundering scheme came to light:

1. Drug kingpin utilized fishing trawlers (along with fish packed in ice) in order to transport the cash;

2. The cash was transported to the Grand Cayman Islands and a bank accepted same on account;

3. The account holder's name, at the bank, was extremely convoluted (think "Panama Papers");

4. In Van City, a complicit lawyer set up a trust account with a well-known trust company with funds from the Grand Cayman Islands bank account transferred therein;

5. A " front-man" was created here in Metro Van - the guy who both purchased residential lots all over as registered owner (including the lot next door to me) and constructed SFDs thereon;

6. The residential lots purchased were 100% financed with mortgages registered in favour of the trust company (beneficial owner of those mortgages was the drug kingpin) ;

7. Subsequent residential improvements or houses built thereon was also financed by the trust company (they were neither knowledgeable nor complicit);

A very sophisticated money laundering scheme involving $~100 million and Metro Van real estate. Then down the drain. Both the "house-builder" as well as the Van City lawyer were both charged/convicted of relevant aiding and betting provisions of the Criminal Code.

All BC real estate assets/bank accounts were seized by the RCMP under the relevant proceeds of crime legislation. What blew me away was that this notorious drug kingpin intended to make the "house next door" to me as his personal residence once he leaved the crowbar hotel.

Fortunately, a well-known U.S. celebrity later purchased said house and was a great guy - residing about 4 months of the year therein before selling off a few years ago.

My main point? Real insight into how a major, sophisticated money laundering operation works involving real estate. Not speculation and conjecture.

[trofirhen]

I'm glad that in this case the authorities were able to bust this creep.
However, I wonder how much other $$$$ gets past the system.
It makes me nervous, angry, and suspicious all at the same time.

[whatnext]

Uh stingray, that would be the same FINTRAC that just warned Vancouver is very vulnerable to money laundering?
https://googleads.g.doubleclick.net/...9&mb=1&clkt=14

[retro_orange]

Originally Posted by whatnext

Uh stingray, that would be the same FINTRAC that just warned Vancouver is very vulnerable to money laundering?
https://googleads.g.doubleclick.net/...9&mb=1&clkt=14

Planning on being on season 2 of Hello Goodbye?

[retro_orange]

Stumbled upon this article on The Walrus today, a good summary of whats going on and of the various measures that have been proposed to alleviate this problem. A great read but not a short article.

http://thewalrus.ca/the-highest-bidder/

Great closing summary:

And what happens twenty or thirty years from now, when the last boomer cashes out? When huge pockets of the city and the region are controlled by wealth generated in another country? When there is no financial district, there is little manufacturing, and there are no industries other than those that cater to rich people?
Stripped of civic culture, the city becomes a seaside resort ossified by wealth. Few historic buildings remain. The east side is densely packed, having been carved up into blisteringly expensive duplexes, laneway houses, and granny suites. The west side is effectively a gated community. The downtown has been overtaken by multi-million-dollar condos in skyscrapers, high-end chain stores, and luxury car dealerships. With so few mom-and-pop businesses, pubs, or cafés, the core is dead at night—the streets, empty wind tunnels.
In this dystopia, nobody talks about the crazy house prices anymore. Vancouver isn’t even on the radar of the average wage earner. The middle class has been hollowed out. With nowhere else to go, the city’s citizenry has pushed inland, filling up acreage in the east and to the south. Residents in need of space—elderly boomers, immigrants, young families—have settled in formerly pastoral areas of Surrey, Langley, and Chilliwack and now live in massive townhouse developments. The bulk of the population has grown around bustling transit hubs such as Surrey City Centre, Coquitlam Centre, and Burnaby’s Brentwood and Metrotown. They are the new glass-tower cities, the new urban cores.
As for Vancouver, there is not much reason to go there—unless you work in the service industry, or you go to ubc, or you have guests in town. It’s a knock-off Monaco, where you drop by to enjoy the view.

quote from http://thewalrus.ca/the-highest-bidder/

[casper]

Perhaps part of the solution is to move to more "social housing".

Instead of social housing geared to the poor we are talking about social housing for the middle class.

In BC social housing is built and operated by non-profit societies with mandates to service certain communities. Sometimes these communities are "regional" sometimes they are different.

Create two or three non-profit housing societies who role is to simply build and rent out family friendly multi-family housing (town houses and 3 bed room apartments) rented at rates that cover the operations and up-keep of the building plus a little bit for growth. The government provides some zero interest loans to kick start the programs. Set things up so as the requirements to have a unit include living in it, as long as you are paying your rent it is yours for life and cap rent at the rate of inflation.

[GilmoreStation]

The Chinese are buying up the high-end market, Millenials' parents are providing downpayment to their children, and the Millenials are leveraged up to the max with their mortgage. All these sum up the craziness in the housing market today.

[trofirhen]

Originally Posted by GilmoreStation

The Chinese are buying up the high-end market, Millenials' parents are providing downpayment to their children, and the Millenials are leveraged up to the max with their mortgage. All these sum up the craziness in the housing market today.

...... Wait 20 years ........

[Sheba]

Son of one of Malaysia's wealthiest tycoons planning Vancouver developments

After being chosen by his dad, Tony Tiah Thee Kian, to invest hundreds of millions in B.C. property, 36-year-old Joo Kim Tiah automatically became one of Vancouver’s key development players as head of the Vancouver property development firm, the Holborn Group.

While working from Asia, the young developer responded to emailed questions from The Province about his vision for important Vancouver sites, how much foreign wealth will pour into Trump Tower condos and his understanding of the criminal probe his father faced years ago in Malaysia.

In January, Joo Kim was named CEO of TA Global Bhd, the property arm of TA Enterprise Bhd, the company his father built. It was the culmination of a plan announced in 2009 — according to an article posted on TA Enterprise’s website — when Tony Tiah re-emerged years after his conviction in a stock-fraud probe to pass the torch to his descendants.

Despite a PR snafu six months ago when Vancouver leaders, including Mayor Gregor Robertson, asked Joo Kim to remove controversial U.S. presidential candidate Donald Trump’s name from the Tiahs’ 63-storey tower on West Georgia, the building’s ultra-pricey condos have been successfully marketed. Asked about the profile of typical investors, Joo Kim said 10 per cent of buyers provided foreign passports for ID — mostly citizens of China, Hong Kong, Taiwan and the U.S. — and 90 per cent identified themselves with Canadian passports or permanent-resident cards.

Joo Kim said he plans next to develop the $300-million, 15-acre Little Mountain site his family bought from the B.C. government in 2007, with hopes to market the first residential units in spring 2017. After receiving initial city approval in 2013 for his plans to build up to 10 mid-rise towers with 234 social-housing units among about 1,400 new homes at Little Mountain, Joo Kim applied for increased height and density last fall. A public hearing is due this summer.

Simultaneously, Joo Kim is working on plans for a major rezoning at Vancouver’s prime downtown redevelopment site, the block bounded by West Georgia, Seymour, Dunsmuir and Richards streets, on lots mostly owned by his family. He hopes to break ground in 2018 for a large mixed-use development that will include retail, office, hotel and residential units.

He will have to decide how to proceed with 500 Dunsmuir, a large plot that houses a heritage-designated and social-housing-encumbered building. The Dunsmuir Hotel has been vacant since 2013 when impoverished residents were moved to other sites. The developer would have to obtain a permit from the city to demolish or repurpose the building for market housing.

[VarBreStr18]

Originally Posted by Sheba

Son of one of Malaysia's wealthiest tycoons planning Vancouver developments

Where is Little Mountain?

[trofirhen]

Originally Posted by VarBreStr18

Where is Little Mountain?

Little Mountain is the hill with Queen Elizabeth Park, at 33rd and Cambie. There may be redevelopable lands in its vicinity. If not, I hope they are not going to to redevelop QE Park itself!!!

[Vin]

Originally Posted by trofirhen

Little Mountain is the hill with Queen Elizabeth Park, at 33rd and Cambie. There may be redevelopable lands in its vicinity. If not, I hope they are not going to to redevelop QE Park itself!!!

And it's neither "Little" nor a "Mountain".

[trofirhen]

Originally Posted by Vin

And it's neither "Little" nor a "Mountain".

Maybe developers are licking their chops, trying to figure out a $$$ price to buy Little Mountain itself from the CoV, and chop up Q.E. park for super-luxury, super-panoramic condos!!!!
Wouldn't that be be nice?

[casper]

Originally Posted by trofirhen

Maybe developers are licking their chops, trying to figure out a $$$ price to buy Little Mountain itself from the CoV, and chop up Q.E. park for super-luxury, super-panoramic condos!!!!
Wouldn't that be be nice?

It is actually a very old low density social housing project that was sold to developers. Sounds like the developer has to build replacement social housing and then is also permitted to build higher density for profit housing in return.

Details at:

http://www.bchousing.org/Initiatives/Redeveloping/LM

[Spork]

CoV released a survey on vacant housing today: http://vancouver.ca/people-programs/...elessness.aspx

Anybody that cares about the housing issues facing the city should complete the survey. It is only open for another 13 days.

[cornholio]

Good friend has a house in Maple Ridge and in his neighborhood a house went on the market for 988,800 (11460 creekside). About 300k above comparables in the area (owner was the original developer of the house and others around there). We thought they listed way too high until we found out they sold (supposedly for asking, others with MLS data can confirm as I dont have it for the area right now). They sold it to a Persian couple (I assume cash) who have not yet landed in Vancouver and who did not see the house or neighborhood. Supposedly one is a doctor and one a engineer so I assume experience class immigrants who will probably work in neither field. This is Maple Ridge. I am a bit familiar with it and these people have no idea where they are moving to and how much they just overpaid and that's probably because they actually have no idea of the local market dynamics or the local demographics. Its actually mind boggling. I mean good luck with your million dollar home in Maple Ridge and dangerously screwing up the local market with their ignorance.

Again the point is foreign cash + ignorance of the local market inflating prices. Whats next. 2 million in Maple Ridge? 4?

[trofirhen]

Originally Posted by cornholio

Good friend has a house in Maple Ridge and in his neighborhood a house went on the market for 988,800 (11460 creekside). About 300k above comparables in the area (owner was the original developer of the house and others around there). We thought they listed way too high until we found out they sold (supposedly for asking, others with MLS data can confirm as I dont have it for the area right now). They sold it to a Persian couple (I assume cash) who have not yet landed in Vancouver and who did not see the house or neighborhood. Supposedly one is a doctor and one a engineer.......
....... I mean good luck with your million dollar home in Maple Ridge and dangerously screwing up the local market with their ignorance.

Again the point is foreign cash + ignorance of the local market inflating prices. Whats next. 2 million in Maple Ridge? 4?

This is really scary and unreal. I don't like government intervention in the free market, but sometimes you gotta. I mean, something's gotta give !!!!! What will Vancouver become in 20 years? Will middle class / working class people be in sufficient social housing? Doubts, Ralph!!! More likely they'll be commuting from Yale, Squamish, or Boston Bar.

[Vin]

Originally Posted by cornholio

Good friend has a house in Maple Ridge and in his neighborhood a house went on the market for 988,800 (11460 creekside). About 300k above comparables in the area (owner was the original developer of the house and others around there). We thought they listed way too high until we found out they sold (supposedly for asking, others with MLS data can confirm as I dont have it for the area right now). They sold it to a Persian couple (I assume cash) who have not yet landed in Vancouver and who did not see the house or neighborhood. Supposedly one is a doctor and one a engineer so I assume experience class immigrants who will probably work in neither field. This is Maple Ridge. I am a bit familiar with it and these people have no idea where they are moving to and how much they just overpaid and that's probably because they actually have no idea of the local market dynamics or the local demographics. Its actually mind boggling. I mean good luck with your million dollar home in Maple Ridge and dangerously screwing up the local market with their ignorance.

Again the point is foreign cash + ignorance of the local market inflating prices. Whats next. 2 million in Maple Ridge? 4?

And again it's our elected government officials that allow this to happen. And I suppose the person willing to sell and the realtor are all locals. In summary, everyone is complicit.

Many locals actually benefit from the ignorance of foreigners, who often get ripped off anyways.

[Bcasey25raptor]

I'm also extremely worried, the entire south coast of BC be it the lower mainland or Victoria is being seriously strained.

[Vin]

Why keep blaming the foreigners when we keep refusing to look in the mirror?

Remember the time when housing was affordable, before our greedy government gave the "most favoured nation" status to China? Who elected these bozos? Please look in the mirror.