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Posted Jun 14, 2019, 7:19 PM
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Registered User
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Join Date: Feb 2009
Location: Vancouver
Posts: 27,499
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Quote:
Originally Posted by cov
Units are rented out or how much renters are willing to rent the unit for, not how much the owner bought it for. The money laundering talks are mostly nimby talking points who believe scapegoating minorities can slow developments in their neighborhoods. It might, to some extent, but it won't increase affordability for sure, nor is affordability their real concern.
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Here we go agian, another person trying to sweep everything under the rug by playing the race card. Here's awake-up call for you, courtesy of this week's Macleans magazine. The Wang n' Zhang show:
Dirty money: it’s a Canadian thing
Canada’s housing markets are rife with shadowy buyers and greasy cash. B.C. was just the beginning.
On paper, Peter Zhang and his wife, Judy Wang, were models for the type of newcomers Canada wanted to attract with its immigrant investor program. Before it was scrapped in 2014, the program’s aim was simple: lure the world’s wealthy to Canada’s shores with the promise of a passport. In return they would bring their business savvy, invest in the economy and create jobs.
Zhang and Wang were undeniably rich. They arrived from China at the end of 2010 with at least $6 million, settling in the suburbs north of Toronto. But almost immediately after, a twisting tale was set in motion that would eventually see Wang accuse a realtor, a lawyer and others of fraud and negligence, and prompt an Ontario judge to raise questions about both the source of Zhang and Wang’s wealth and a string of real estate and mortgage transactions tied to the case.
At the start of 2011, the couple bought their first home, a six-bed, five-bath pile in Richmond Hill, Ont., for $1.25 million—and paid for it entirely in cash. By February, however, Zhang and Wang had separated, claiming in court that they divorced in 2013, though Ontario Superior Court Justice Paul Perell, in a November 2017 decision on a procedural matter in the lawsuit, described the divorce decree as “suspicious.” (In an email through her lawyer, Wang now says they divorced in June 2018.) Regardless, the pair continued to buy and develop three more Richmond Hill and nearby Thornhill properties together, largely in cash, through their joint company Yi Hao Investments. Wang bought a fourth property on her own in Vaughan with a 100 per cent loan-to-value mortgage from RBC in 2017. All told, she and Zhang bought five properties, worth $9.3 million at the time of purchase.
Aside from real estate, a considerable chunk of Zhang and Wang’s wealth was going to cover Zhang’s gambling activities. Over the next several years, Wang testified, she transferred up to $6 million to him from the sale of properties. (Justice Perell noted in his decision that neither Wang nor Zhang had any employment or business interests in Canada beyond real estate investing.) Meanwhile, the couple entered into a series of byzantine mortgage transactions with real estate agent Yan-Ling Ding and lawyer Rahul Kesarwani to generate cash for Zhang’s gambling. For instance, at one point, according to Justice Perell’s findings, Zhang’s ownership of Yi Hao was transferred to Ding to conceal Zhang’s identity so he could obtain a $900,000 mortgage from CIBC, while Kesarwani arranged a high-interest $150,000 private mortgage from his own firm for Zhang. (Ding and Kesarwani were offered the opportunity to comment through their lawyers but didn’t respond, while attempts to reach Zhang were unsuccessful. Through her lawyer, Wang said she was unable to provide contact information for Zhang “at this time.”)..
...But Justice Perell also raised questions that are increasingly being asked across the country in other cases: Where did the money come from, and how was it moved to Canada? Wang, on the advice of her lawyer, declined to answer those questions during her testimony. But in his decision, Perell highlighted the sworn testimony of several of the defendants. “[The defendants] believe that Mr. Zhang was a criminal who managed to get his wealth out of China to become a money launderer in Canada,” he wrote. “I make no finding other than saying that it is unknown how Ms. Wang and Mr. Zhang acquired their considerable wealth or how they got it out of China for investments in Canada.”....
.....“Everyone is interested now in how much of that money coming from China is legitimate,” says Christine Duhaime, a financial crime lawyer who has assisted Chinese companies in recovering money stolen from the country that found its way into Vancouver’s real estate market. China has long maintained capital controls that allow its citizens to exchange and withdraw only US$50,000 a year. Other than that, citizens need explicit approval to move their money out of the country.
To show how creative some are getting to circumvent those limits, which have grown more restrictive in recent years, Duhaime points to one case she’s aware of, in which a businessman in China loaded 180 employees onto buses, each carrying a duffle bag stuffed with US$50,000 in cash, and shuttled them to the bank. The employees deposited the money into their accounts and then wired the funds to their boss in Vancouver. The flurry of wire transfers failed to trigger any red flags at the Canadian bank, she says: “For too many years, the banking industry in Canada has taken a position that we don’t ask questions about the providence of money from China.”...
https://www.macleans.ca/economy/real...goes-national/
If anyoen can read that and still believe foreign money doesn't drive up prices and thereby increase rents, they would have to be incredibly dense.
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