The Metro Vancouver Real Estate Thread

[Klazu]

If someone buys three houses with same go, I think it is pretty clear he's not gonna live in them.

It's interesting that a 15% tax pushed the guy to buy in another country where the local currency is almost 40% stronger... That considered, I think the real reason here is much cheaper houses in Seattle and not the foreign tax at all. 1-2 million houses in Bellevue are much more opulent than in West Vancouver / Vancouver Westside teardowns...

[Caliplanner1]

Originally Posted by Klazu

If someone buys three houses with same go, I think it is pretty clear he's not gonna live in them.

It's interesting that a 15% tax pushed the guy to buy in another country where the local currency is almost 40% stronger... That considered, I think the real reason here is much cheaper houses in Seattle and not the foreign tax at all. 1-2 million houses in Bellevue are much more opulent than in West Vancouver / Vancouver Westside teardowns...

.....not to mention location, location, location in that the Seattle area might be seen (right or wrong) as having more social and economic opportunities than Vancouver (in the bigger picture/scheme of things).

[trofirhen]

Whatever the case, cause, or outcome, I'm just glad that they have focussed their attentions away from solely Vancouver. If that tax scared them off, go give the virus to somewhere else.

[Vin]

Originally Posted by whatnext

Or they let them sit empty for a couple years before they get bored and move on. But the presale investment scenario is bad enough and what has led us into this bubble. Buyers purchase not with the expectation of buying a home, but that the commoditized unit will appreciate rapidly enough to cover all your costs and make a profit. If you want to see what kind of units that creates, check out the Trump Tower thread. Overpriced units with shitty layouts for actual living.

Originally Posted by whatnext

Single family Home sales continued their dramatic collapse in November, led by a whopping 64% fall in Richmond (foreign buyers not a factor, eh?). Condos, a market driven more by those who actually live and work here, remain stable.

http://vancitycondoguide.com/novembe...market-report/

Contradictory postings?

And I thought you always lament the "fact" that condos are empty but love having more SFHs around?

[whatnext]

Originally Posted by Vin

Contradictory postings?

And I thought you always lament the "fact" that condos are empty but love having more SFHs around?

Contradictory? No.

There are lots of condos sloshing around the market, empty or otherwise thanks to speculative overbuilding. Since working Vancouverites have been priced out of SFH's by shady Chinese money, condos are the only thing they can afford. The answer is to slap an outright ban on foreign ownership of all residential real estate.

[Stingray2004]

Well, it's continuing in the SFD segment...

Prices plunging: Houses selling well below asking, some under $1M

BC CTV News

Published Monday, December 5, 2016 5:34PM PST

Listing prices for detached homes appear to be falling as Vancouver's real estate market faces what an expert calls "significant headwinds."
Data released Friday showed that those looking to buy a single family detached home in the city last month forked over about $1.5 million in Metro Vancouver, but recent listings suggest that the benchmark is falling.

CTV News found a number of East Vancouver homes priced under then $1 million mark during a search of MLS listings on Monday, including one that sold for $560,000 below the initial asking price. Detached houses are selling for hundreds of thousands of dollars less than owners are asking.

That home, located in Renfrew Heights, was initially listed at $1.36 million in August, but sold for $800,000 in mid-November. Sutton West Coast realtor David Hutchinson has been tracking plunging prices and found several detached homes listed below $1 million, some of which had been recently renovated.

"If you want to sell, you have to be priced sharply, and you see a lot of price drops," Hutchinson told CTV.

And even with price drops, he added, he's seen many sale prices lower than what sellers are asking for. He said he knew of one home in the west side of the city that was initially priced at $3.9 million, but when it didn't sell, the owners reduced the price. They kept reducing it in small increments, but eventually they couldn't wait any longer, and had to drop the price by nearly $1 million.

Another home on West 8th in Kitsilano was listed for $2.5 million, but could only fetch $1.6 million.

"There's not this crazy deluge of offers coming in like before, when you could price it below the market value and wait for all the offers to come in. That's not happening anymore," Hutchinson said.

"Buyers are being a little more picky now and you didn't see that before."

http://bc.ctvnews.ca/prices-plunging...r-1m-1.3190864

[whatnext]

Originally Posted by Stingray2004

Well, it's continuing in the SFD segment...



http://bc.ctvnews.ca/prices-plunging...r-1m-1.3190864

Good to see that market correcting. Let's hope it sticks.

[retro_orange]

More than half of B.C.’s most expensive homes owned by secret shell companies spurring money laundering fears

Sam Cooper
More from Sam Cooper

Published on: December 9, 2016 | Last Updated: December 9, 2016 12:35 PM PST


4707 Belmont in Vancouver is a $57-million Point Grey property owned through a shell company in the British Virgin Island. Ric Ernst / P
Share Adjust Comment Print
Almost half of Vancouver’s 100 most expensive homes are bought using shell companies or other financial tools that obscure the identity of the true owners, a report from anti-corruption group Transparency International says.
The report, which focuses on money laundering and tax evasion vulnerabilities in Canadian real estate through a study of Vancouver luxury homes, slams Canada for failing to close home-ownership loopholes related to shell companies, trusts and nominees.

The report also concludes the prevalence of non-transparent ownership in B.C. luxury real estate makes it impossible to measure how much offshore cash is invested in B.C. homes, even though B.C. is attempting to collect data on foreign ownership.

“An influx of overseas capital is one of several causes of rising property prices, (in Vancouver and Toronto) but the extent and impact of foreign investment remains unknown since very little data is collected on property owners,” the report says. “Individuals can use shell companies, trusts and nominees to hide their beneficial interest in Canadian real estate.”
Compared to other advanced economies, Canada has weak transparency laws, the report states. Transparency International is a non-government coalition that studies global corruption and advocates legal reforms to fight financial crimes.
“Though Canada is not known as a global hub for money laundering 
and tax evasion, our legal framework and lax enforcement environment make it easy for individuals to misuse private companies and trusts,” it says. “Anonymous companies and trusts are the getaway cars of financial crime. … Canada is an increasingly attractive destination for those looking to park and invest the proceeds of crime.”

The report notes that Canada has for unknown reasons failed to live up to its international commitments to close loopholes that are abused by financial criminals, and a resulting “secrecy regime” has emerged.

To illustrate the point, the report notes that “as a testament to the secrecy afforded in Canada, the law firm at the centre of the Panama Papers leak, Mossack Fonseca, marketed Canada to its clients as an attractive place to set up anonymous companies.”
Image plots some of the high-end City of Vancouver homes that are not directly owned. Transparency International Canada.
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 says.
Trusts are private contracts — which are sometimes voluntarily disclosed to protect the owner’s interests — but they do not have to be registered in Canada or listed on land titles, report author Adam Ross said in an interview with Postmedia. Therefore, it is impossible to know how many of the 100 homes examined are owned through undisclosed trusts, Ross said.

“Looking at these 100 homes is a good indication that we have no way of knowing who really owns property in B.C.,” Ross said. “It should be ringing alarm bells for most Canadians … this is the perfect storm for people outside Canada to come to the weakest link for potential money laundering in real estate.”

Trusts and shell companies can be used in B.C., the report states, to avoid property transfer taxes. Ross said there are legitimate reasons for commercial real estate to be transferred through companies without triggering property tax. But this “tax loophole is also available to owners of residential property that is held through shell companies,” the report states.
In an interview, UBC real estate economist Tsur Somerville said he can see legitimate uses of some of the ownership structures outlined in the Transparency International report. For example, using companies to transfer ownership shares in companies that own multiple properties without triggering property tax is reasonable, Somerville said. But he said “I think it is different for single unit properties.”

Ross said crime groups in Canada are believed to hide ownership with the means outlined in the report, and a host of factors he looked at suggest the methods are also used by foreign buyers. The report notes that a 2016 report from the Paris-based Financial Action Task Force, an inter-government anti-money laundering agency, says corrupt officials from China are known to use obscure ownership structures to launder money in Vancouver real estate.

It is also impossible, the report states, to judge how many nominees are represented in the sample of 100 luxury homes.
A nominee is a person who appears as owner on title of a home but is not the real buyer. For the purposes of the report, Ross classified students and housewives on land titles as nominees.
Of the 42 luxury properties in the sample that were sold in the last five years, 26 per cent were owned on paper by students or homemakers, the report says. But “only one of the 58 homes bought before 2011 is owned through an obvious nominee,” the report says.
4833 Belmont was bought in 2016 for $31.1 million to a student, most likely a nominee for the true ‘beneficial’ owner, the report says. PNG
The report cites a recent Postmedia story that revealed a student from China had bought a Point Grey mansion for $31.1 million. “Though the value of the transaction was unique, the deal is part of a wider trend whereby unemployed individuals are acquiring luxury property in the city with other people’s capital,” the report says. “These individuals have no source of employment income and are likely nominees for family or friends.”
The majority owner of a Point Grey mansion at 4833 Belmont that sold earlier this year for a record $31.1 million is a student, property records show.
The use of nominee owners is a common tool for money laundering through real estate, according to an RCMP case study, the report says. Also, “beneficial owners can use nominees to avoid or evade tax by claiming principal residence or first-time homebuyer exemptions,” the report says.
5695 Newton Wynd is owned by a B.C. numbered company with only one director listed, a lawyer. That, the report says, shields the true owner behind lawyer-client privilege. Arlen Redekop Arlen Redekop / Vancouver Sun
Shell companies, defined as companies with no business operations that are only used to hold assets, are ripe for abuse in B.C., Ross said.

The report says in Canada there is no need to show documentation to prove your identity as a company owner, and owners can list other people as nominees and directors, and in B.C. shareholders don’t have to be identified.

“A recent study found that of 60 countries around the world — including known tax havens and secrecy jurisdictions — only in Kenya and a select few U.S. states is it easier to set up an untraceable company than it is in Canada,” the report states. “In Canada, more rigorous identity checks are done for individuals getting library cards than for 
those setting up companies.”
The report cites several examples of anonymous home ownership through foreign registered companies. In one case, a $57 million Point Grey property is owned through a shell company in the British Virgin Islands. In another, an anonymous owner bought two penthouses in the Fairmont Pacific Rim for $40 million in 2013, through a company in the United Arab Emirates.
The majority owner of a Point Grey mansion at 4833 Belmont that sold earlier this year for a record $31.1 million is a student, property records show.
The report recommends the federal government establish a central registry of companies and trusts and their true beneficial owners, which is a measure already taken in the United Kingdom and due to be established in other first-world economies.
“Anonymous companies and trusts deprive treasuries of billions of dollars in tax revenues each year, add considerable cost to law enforcement, and hinder asset recovery,” the report says. Establishing a registry of hidden owners would save the government money and “would also help to level the playing field, ensuring that responsible taxpayers do not shoulder the burden for those seeking to skirt the system.”

The report recommends that “beneficial ownership information should be included on property title documents, and no property deal should be allowed to proceed without that disclosure. In cases where a property is held through a nominee, this should be explicitly stated and the identity of the beneficiary should be disclosed.”

http://vancouversun.com/business/rea...ering-concerns

[SpongeG]

Home prices jumped 40 per cent in Vancouver so where are all the cranes?

NATALIE OBIKO PEARSON
Bloomberg News
Published Tuesday, Dec. 13, 2016 1:53PM EST
Last updated Tuesday, Dec. 13, 2016 2:01PM EST

When something becomes more expensive, people will produce more of it. According to that pillar of Econ 101, new homes should be springing up all over Vancouver. Which they aren’t.

The property market on Canada’s west coast is one of the world’s hottest, or most unhinged, depending on your perspective. From local tech whizzkids to wealthy Chinese scouting for safe havens, and other investors just seeking returns on a quick flip, demand for Vancouver houses seems endless. Meanwhile, thanks to strict land-use rules and lobbying by existing homeowners, supply has stalled.

“When you have a 40 per cent increase in prices in a year, the skyline should be absolutely saturated with cranes,” said Thomas Davidoff, head of the University of British Columbia’s Centre for Urban Economics and Real Estate. “That’s not what you see in Vancouver.”

What you see instead is the shortest list of homes for sale in almost a decade, even as the price of a typical single-family home surged to $1.5-million, about 20 times what the median household earns in a year.

Wrong Direction?

Vancouver isn’t the only place in the world, or even in Canada, where house prices have soared beyond the reach of residents: it’s happening in the global economy’s poster-towns, like London and San Francisco, and in less-feted Auckland, Stockholm and Toronto too. A common thread that links such cities is curbs on the availability of land for building. Yet as the Vancouver boom turned into a crisis of affordability, and authorities moved to tackle the problem, housing supply wasn’t the direction they were looking.

In August, the province of British Columbia imposed a 15 per cent tax on foreign buyers, and in October the federal government tightened rules on mortgage eligibility. Those steps had some success in cooling the market – but not in a good way, according to Cameron Muir, chief economist at the British Columbia Real Estate Association. That’s because measures aimed at capping demand also send a signal to developers and builders to slow down, he said.

...

http://www.theglobeandmail.com/real-...ticle33308460/

[whatnext]

Originally Posted by retro_orange

http://vancouversun.com/business/rea...ering-concerns

Why does being ultra-rich seem to go hand in hand with being ultra-tacky?

[LeftCoaster]

Because the only ultra rich people you ever see are ultra tacky.

Those who are ultra rich who aren't tacky tend to keep from the public eye.

[connect2source]

43% of Metro Vancouver homes now valued over $1M, West Van at 97%.

http://globalnews.ca/news/3140613/al...-more-than-1m/

[Vin]

Originally Posted by SpongeG

Home prices jumped 40 per cent in Vancouver so where are all the cranes?

NATALIE OBIKO PEARSON
Bloomberg News
Published Tuesday, Dec. 13, 2016 1:53PM EST
Last updated Tuesday, Dec. 13, 2016 2:01PM EST

When something becomes more expensive, people will produce more of it. According to that pillar of Econ 101, new homes should be springing up all over Vancouver. Which they aren’t.

The property market on Canada’s west coast is one of the world’s hottest, or most unhinged, depending on your perspective. From local tech whizzkids to wealthy Chinese scouting for safe havens, and other investors just seeking returns on a quick flip, demand for Vancouver houses seems endless. Meanwhile, thanks to strict land-use rules and lobbying by existing homeowners, supply has stalled.

“When you have a 40 per cent increase in prices in a year, the skyline should be absolutely saturated with cranes,” said Thomas Davidoff, head of the University of British Columbia’s Centre for Urban Economics and Real Estate. “That’s not what you see in Vancouver.”

What you see instead is the shortest list of homes for sale in almost a decade, even as the price of a typical single-family home surged to $1.5-million, about 20 times what the median household earns in a year.

Wrong Direction?

Vancouver isn’t the only place in the world, or even in Canada, where house prices have soared beyond the reach of residents: it’s happening in the global economy’s poster-towns, like London and San Francisco, and in less-feted Auckland, Stockholm and Toronto too. A common thread that links such cities is curbs on the availability of land for building. Yet as the Vancouver boom turned into a crisis of affordability, and authorities moved to tackle the problem, housing supply wasn’t the direction they were looking.

In August, the province of British Columbia imposed a 15 per cent tax on foreign buyers, and in October the federal government tightened rules on mortgage eligibility. Those steps had some success in cooling the market – but not in a good way, according to Cameron Muir, chief economist at the British Columbia Real Estate Association. That’s because measures aimed at capping demand also send a signal to developers and builders to slow down, he said.

...

http://www.theglobeandmail.com/real-...ticle33308460/

It's OK many of the construction cranes are found over at the suburb cities. More people will move there and make them the economic engines of this region.

[Sheba]

This is the closest to where I thought this should be posted:

Over one billion litres of water spews from Vancouver aquifer after inexperienced contractor error

More than one billion litres of water have spurted from a $3 million residential lot on the west side of Vancouver since inexperienced drillers breached an aquifer under the site then fled the country 15 months ago.

Qualified crews took over the site a few days after the breach and after months of planning and preparation (and pauses for government approvals), they could be just a few steps away from sealing the hole.

Completion of the project will come as relief to nearby residents, whose neighbourhood is now dotted with more than 150 sensors to monitor ground movement amid an ongoing fear that a sinkhole could develop around the breach and under homes.

...

As of late summer, the city had spent $2.7 million dealing with the breached aquifer. Staff plan to use legal mechanisms to recoup the costs from the property owner.

That doesn't give me a lot of confidence in the construction industry...

[Alex Mackinnon]

Originally Posted by Sheba

This is the closest to where I thought this should be posted:

Over one billion litres of water spews from Vancouver aquifer after inexperienced contractor error


That doesn't give me a lot of confidence in the construction industry...

What country's construction industry are you referring to?

The home owner (a Mr. Feng Lin Liu) was paying for this under the table without a contract, using an unlicensed contractor without local experience, who also apparently was a moron. They also didn't file a permit to drill, then they fled the country shortly after.

Good news is that the city can probably recover the costs from selling the property.

[whatnext]

Originally Posted by Sheba

This is the closest to where I thought this should be posted:

Over one billion litres of water spews from Vancouver aquifer after inexperienced contractor error


That doesn't give me a lot of confidence in the construction industry...

Actually I had started a thread about that back in March:
http://forum.skyscraperpage.com/show...hlight=aquifer

Interesting to see it hasn't been stopped and the owner fled the country. Is that promised extradition treaty going to allow him to be returned? In the meantime $2.7 million of our money has been washed away dealing with it.

[LeftCoaster]

Originally Posted by whatnext

Actually I had started a thread about that back in March:
http://forum.skyscraperpage.com/show...hlight=aquifer

Interesting to see it hasn't been stopped and the owner fled the country. Is that promised extradition treaty going to allow him to be returned? In the meantime $2.7 million of our money has been washed away dealing with it.

That land is worth far FAR more than 2.7 million. The taxpayers will have no problem recouping their costs.

[Alex Mackinnon]

Originally Posted by whatnext

Actually I had started a thread about that back in March:
http://forum.skyscraperpage.com/show...hlight=aquifer

Interesting to see it hasn't been stopped and the owner fled the country. Is that promised extradition treaty going to allow him to be returned? In the meantime $2.7 million of our money has been washed away dealing with it.

I wouldn't worry about that. Just put a lien on the property.

[whatnext]

Garth Turner points out that the number of Vancouver homeowners deferring their property taxes has gone up nearly 500% over the last decade to over 6,000! Combined with the homeowners grants this amount to about 250 mil gifted to property owners. If I was a renter I'd be pissed. Seriosuly millenials, get off your asses and vote for someone who will end this kind of ridiculous policy, which coddles the elderly house-rich voter!

[memememe76]

This is a problem? Once they sell or they die, the taxes are due. TBH, I am surprised only 6000 homeowners are taking advantage of this program. Not sure what this has to do with renters. Homeowners can only defer their taxes on their principal residence. I suppose Garth Turner would rather the owners be kicked out of the homes that the have lived in for decades.

I mean, 500%. OMG, from 1200 to 6000. The horror! That could just be due to more people aging into the eligibility of the program.