Thursday, May 9, 2019

$5 billion laundered through B.C. real estate in 2018

by Canadian Press

by Dirk Meissner
An independent report has found that $5 billion was laundered through British Columbia's real estate market last year and increased the cost of buying a home by five per cent.
The report by former B.C. deputy attorney general Maureen Maloney estimated that $7.4 billion overall was laundered in B.C. in 2018, a figure she says is conservative and added the total amount across Canada was about $47 billion.
Attorney General David Eby told a news conference on Thursday that money laundering is a ``malignant cancer'' on society and a ``national-level crisis.''
The provincial government commissioned two reports last September to shed light on money laundering by organized crime in the province's expensive real estate market.
Former deputy RCMP commissioner Peter German says in his report that the infusion of illicit money into the B.C. economy led to a frenzy of buying that raised the assessed values of homes throughout much of Metro Vancouver.
German's report says there are thousands of specific properties worth billions at high risk for potential money laundering.
An international anti-money laundering agency said last year that organized criminals were laundering about $1 billion annually in the province.
But Maloney's report details far more cash was filtered.
"As a conservative estimate, we're looking at money laundering on the scale of $7.4 billion in 2018. That's just for B.C., let alone the rest of Canada,'' she said.
Eby said wealthy criminals and those trying to evade taxes have run out of the province for too long, to the point they're distorting the economy, hurting families looking for housing and impacting those who have lost loved once because of the opioid overdose crisis.
"I am under no illusions that the problems we face are unique to B.C.,'' said Eby.
Federal Organized Crime Reduction Minister Bill Blair said earlier that he and Eby have met several times this year and are working together to fight money laundering.
The reviews aimed to shed light on money laundering by organized crime in real estate after last June's report on dirty money in casinos by German.
Following the gaming report, German was appointed to conduct a second review to focus on identifying the scale and scope of illicit activity in the real estate market.
Eby said earlier this week he was shocked to hear some criminals laundering money through B.C.'s luxury car sector are getting provincial sales tax rebates.
The attorney general said the government will move to plug tax loopholes to prevent the vehicle tax rebate that cost the province almost $85-million dollars since 2013.
B.C. also tabled legislation aimed at preventing tax evasion and money laundering by shining a spotlight on anonymous real estate owners hiding behind shell and numbered companies.
Several regulatory and professional agencies anticipated the findings of the reports and put anti-money-laundering policies in place last month.
The B.C. Real Estate Council said it would be partnering with the federal Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, to identify and deter money laundering and terrorist financing in the industry.
The B.C. Real Estate Association, the body that serves 23,000 realtors in B.C., said in April that it would join with four other agencies to keep the proceeds of crime out of real estate.
The other participating organizations include the Appraisal Institute of Canada, BC Notaries Association, Canada Mortgage Brokers Association and the Real Estate Board of Greater Vancouver.
Each organization has committed to sharing information, accepting only verified funds and making anti-money laundering education mandatory for its agents.

The Canadian Press

Thursday, May 2, 2019

April another lethargic month for Metro Vancouver home sales: Real estate board

BY THE CANADIAN PRESS


VANCOUVER — Home sales remained sluggish across Metro Vancouver in April and real estate analysts slam government policies for the lack of activity.
The Real Estate Board of Greater Vancouver says residential home sales last month were 43.1 per cent below the 10-year April sales average.
Across the region, April sales totalled 1,829, a 29 per cent decrease compared with sales one year earlier, but the board says activity has edged up 5.9 per cent since March.
The listless market is also reflected in prices, with the board reporting the composite benchmark price for Metro Vancouver residential properties is currently $1,008,400, an 8.5 per cent year-over-year decrease, and a 0.3 per cent skid since March.
Real estate board president Ashley Smith blames government intervention for the tepid market.
She says the federally imposed mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, causing entry-level buyers to struggle to secure financing.
“Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand,” says Smith in a statement, adding that more homes are for sale in Metro Vancouver than at any time since October 2014.
“This trend is more about reduced demand than increased supply,” she says.
“The number of new listings coming on the market each month (is) consistent with our long-term averages. It’s the reduced sales activity that’s allowing listings to accumulate.”
Just over 14,000 homes are currently listed for sale in Metro Vancouver, which the board says is a 46 per cent increase in one year and a 12 per cent leap since the tally one month ago.
The sales-to-active listings ratio also saw a nearly one per cent slip since March, to its April setting of 12.7 per cent.
The calculation reflects the ratio between the number of homes sold and the number of new listings being added to the market. Broken down by property type, it stands at 9.4 per cent for detached homes, 15.4 per cent for townhomes and 15.3 per cent for condo apartments.
Analysts expect downward pressure on prices when the ratio dips below 12 per cent for several months, while home prices tend to climb when the ratio moves above 20 per cent.
The benchmark price in April for a detached home was $1,425,200, an 11.1 per cent drop in one year and a slip of 0.8 per cent compared with the setting one month earlier.
The benchmark price for a Metro Vancouver condo was $656,900, down 6.9 per cent from April of last year but unchanged since March 2019.
Townhome prices also didn’t budge month-to-month but the board says April’s benchmark of $783,300 is 7.5 per cent lower than it was in April of last year.


Tuesday, April 2, 2019

Prospective home buyers remain on the sidelines in March


Metro Vancouver home sales dipped to the lowest levels seen in March in more than three decades.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,727 in March 2019, a 31.4 per cent decrease from the 2,517 sales recorded in March 2018, and a 16.4 per cent increase from the 1,484 homes sold in February 2019.
Last month’s sales were 46.3 per cent below the 10-year March sales average and was the lowest total for the month since 1986.
“Housing demand today isn’t aligning with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced,” Ashley Smith, REBGV president said. “For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market.”
“What policymakers are failing to recognize is that demand-side measures don’t eliminate demand, they sideline potential home buyers in the short term. That demand is ultimately satisfied down the line because shelter needs don’t go away. Using public policy to delay local demand in the housing market just feeds disruptive cycles that have been so well-documented in our region.”
There were 4,949 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in March 2019. This represents an 11.2 per cent increase compared to the 4,450 homes listed in March 2018 and a 27.2 per cent increase compared to February 2019 when 3,892 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,774, a 52.4 per cent increase compared to March 2018 (8,380) and a 10.2 per cent increase compared to February 2019 (11,590).
For all property types, the sales-to-active listings ratio for March 2019 is 13.5 per cent. By property type, the ratio is 9.4 per cent for detached homes, 15.9 per cent for townhomes, and 17.2 per cent for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,011,200. This represents a 7.7 per cent decrease from March 2018, and a 0.5 per cent decrease compared to February 2019.
Sales of detached homes in March 2019 reached 529, a 26.7 per cent decrease from the 722 sales in March 2018. The benchmark price for a detached home is $1,437,100. This represents a 10.5 per cent decrease from March 2018, and a 0.4 per cent decrease compared to February 2019.
Sales of apartment homes reached 873 in March 2019, a 35.3 per cent decrease compared to the 1,349 sales in March 2018. The benchmark price of an apartment property is $656,900. This represents a 5.9 per cent decrease from March 2018, and a 0.5 per cent decrease compared to February 2019.
Attached home sales in March 2019 totalled 325, a 27.1 per cent decrease compared to the 446 sales in March 2018. The benchmark price of an attached home is $783,600. This represents a six per cent decrease from March 2018, and a 0.7 per cent decrease compared to February 2019.

copyright Real Estate Board of Greater Vancouver

Saturday, February 2, 2019

Toronto new home sales plunge to lowest in almost 20 years as unsold condos pile up

New home buyers finally reached their limit in Toronto last year.


After years of frenzied price increases, sales of new homes in Canada’s biggest city sunk to the lowest in almost two decades in 2018 and the supply of unsold condos piled up, according to a pair of new reports released Friday.
“Greater caution” should be taken when investing in new condo units, particularly over the short-term, as trends point toward slower appreciation, Shaun Hildebrand, president of condo research firm Urbanation, said in the report. The “market has started to normalize after unprecedented activity in recent years.”
Toronto’s housing market is dramatically cooling after higher interest rates and new mortgage regulations bite. The city joins other global metropolises such as London and Sydney seeing a slowdown as international investors retreat and domestic buyers balk at higher prices.
Single-family homes showed the biggest decline, plunging 50 per cent to 3,831 from 2017 and 74 per cent below the 10-year average. Condos sales fell 38 per cent to 21,330, but only 4 per cent below the 10-year average.
While the benchmark price of a new single-family home slumped 6.7 per cent to $1,143,505 in December on the year, condo prices surged 11 per cent to $796,815, according to BILD’s report.
But figures from Urbanation show further weakness building in condos as well. A record 21,991 units are expected to be completed this year, up 29 per cent from 2017. While 98 per cent of those units are pre-sold, more than half were bought by investors who will either rent their units or sell them, the firm said.
The number of unsold units in development jumped 47 per cent in the fourth quarter from the year before to more than a two-year high and price gains for units under development grew only 0.4 per cent between the third and fourth quarters, the smallest quarterly increase in almost three years.
“The slowdown in activity last year can partly be attributed to less demand from investors, who typically represent the largest component of new condominium purchasers,” in the Toronto region, according to Urbanation’s report.
“The market is out of balance,” said David Wilkes, president and chief executive officer of BILD, an industry group for about 1,500 companies in the Toronto region. “We join other industry groups in calling on the federal government to revisit the stress test and allow a longer amortization period for first-time buyers. And we look forward to working with our municipal partners on removing barriers to development such as excessive red tape and outdated bylaws.”
Bloomberg.com

Tuesday, January 8, 2019

Fraser Valley home sales hit 5-year-low last year

Home sales in the Fraser Valley have been above 20,000 for 3 consecutive years but that run was broken in 2018.
Fraser Valley Real Estate Board’s MLS saw 15,586 sales in 2018, down more than 30% from the previous year and the lowest total since 2013. The total dollar value of transactions was down almost $4 billion to $11.8 billion.
Board president John Barbisan says that the figures reflect a return to more normal activity for the market.
“There is still a great deal of interest for Fraser Valley real estate, but with prices moving slowly and more inventory becoming available, many consumers are taking a deliberate approach now that they can afford to,” he said.
New listings hit their fourth highest on record with 32,058 received by the Board’s MLS system in 2018. Barbisan says that sellers need to ensure correct pricing as buyers take control.
Fraser Valley home prices
At $965,300, the Benchmark price for a single family detached home in the Fraser Valley decreased 1.1% compared to November 2018 and decreased 1.5% compared to December 2017.
For townhomes, the benchmark of $531,900, was down 0.2% month-over-month but up 3.7% year-over-year.
The Benchmark price for apartments/condos decreased 1% month-over-month but increased 7.6% year-over-year to $418,300.

by Steve Randall
REP

Friday, January 4, 2019

Metro Vancouver home sales fell to 18-year low in 2018

The weakness of the Metro Vancouver housing market over the past year was highlighted by a report from the region’s real estate board Thursday.
It said that sales for the whole of 2018 were the worst annual total for the region since 2000 and 25% below the 10-year average.
Real Estate Board of Greater Vancouver reported total sales through the MLS for the year reached 24,619, down 31.9% from 2017 and 38.4% below the total for 2016.
“This past year has been a transition period for the Metro Vancouver housing market away from the sellers’ market conditions we experienced in previous years,” Phil Moore, REBGV president said. “High home prices, rising interest rates and new mortgage requirements and taxes all contributed to the market conditions we saw in 2018.”
Weakness continued to the end with December sales down 46.8% year-over-year to 1,072. That’s 33.3% fewer sales than in November 2018.
Downward pressure on prices
The MLS® HPI composite benchmark price for all residential homes in Metro Vancouver ended the year at $1,032,400, down 2.7% from a year earlier. The benchmark for detached homes was down 7.8% year-over-year; it was down 0.6% for apartments; but was up 1.3% for townhomes.
However, over the past 6 months, the drop was 7.3% for detached homes, 6.4% for apartments, and 5.3% for townhomes.
“As the total supply of homes for sale began to accumulate in the spring, we began to see downward pressure on prices across all home types throughout the latter half of the year,” Moore said.
Home listings totaled 53,614 in 2018, down 1.9% year-over-year.
“The supply of homes for sale will be an important indicator to follow in 2019. We’ve had record building activity in recent years and many projects will complete soon. This will provide additional housing options for home buyers across the region,” Moore said.
by Steve Randall
REP

Thursday, December 13, 2018

Rental task force recommends ban on renovictions, not allowing stratas to restrict rentals


The province’s rental task force is calling for an immediate ban on renovictions, a province-wide rent bank for low income British Columbians, and the elimination of a strata corporation’s ability to ban owners from renting out their units.

Renters currently have little recourse once they are told they must leave their unit for the owner to renovate. In some cases renters are forced out for minor upgrades to the home in order for the landlord to put in substantial rent increases.
“One of the most frequently mentioned challenges from renters was unfair evictions, including renovictions and other evictions, based on false claims,” the report reads.
“They told the task force about how stressful it was to live with the constant threat of being forced from their home with too little time to find alternative housing in a challenging rental market.”
The task force found the Residential Tenancy Act needs to be updated to provide clear guidelines on what actions are acceptable during renovations. One of the suggested changes is to allow tenants to remain as long as they are willing to accommodate the renovations.
The task force is also suggesting that evictions should be reserved for the rare instances of serious, major and long-term renovations.
“Many renters called for improvements to the right of first refusal, specifically asking for tenants to be able to return to their units at the same or a similar rent after renovations have been completed,” the report reads.
The task force previously recommended the provincial government change the maximum rent-increase formula. Now landlords are only allowed to increase rent by the rate of inflation and have scrapped the ability of landlords to tack on an additional two per cent annually. The Residential Tenancy Branch can approve “modest rent increases” above inflation.
The task force consulted with renters, landlords, non-profit housing providers and advocates and produced a total of 23 recommendations.
There are 1.5 million renters in British Columbia. The vacancy rate is 1.3 per cent province-wide and, according to the report, below one per cent in Vancouver and Kelowna.
The provincial government has brought in a speculation tax that will punish B.C. homeowners who have multiple properties in affected areas or other Canadians who own property in the province. One of the criticisms of the tax is that it could unfairly punish homeowners who live in stratas where rentals are not allowed.
The government must now review the report but is expected to put in place most, if not all, of the recommendations. The task force consists of NDP MLAs Spencer Chandra Herbert and Ronna-Rae Leonard as well as Green Party MLA Adam Olsen.
“The task force believes that a breakdown in the landlord/renter relationship is often the result of a lack of understanding or a lack of commitment to respecting the rights and responsibilities of each party,” the report reads.
“In some cases, this is deliberate. However, in most cases, this is due to misinformation or lack of knowledge.”
Full list of task force recommendations:
  1. Stop renovictions
  2. Work with local governments to develop tenant compensation and relocation guidelines in the case of demolition of purpose-built rental to reduce dislocation, and homelessness of affected tenants.
  3. Set a clear timeline for a tenant’s decision on the use of a right of first refusal.
  4. Implement a B.C.-wide rent bank system for low-income people.
  5. Strengthen enforcement of the law, including implementing a clear process for making, investigating and reporting administrative penalty complaints.
  6. Strengthen penalties for breaking the law, including refusal of service for outstanding administrative penalties.
  7. Investigate ways to provide affordable access to bailiff services in smaller and more remote communities.
  8. Investigate other options to increase the repayment rate for damages, non-payment of rent and other storage costs if ordered by the residential tenancy branch.
  9. Increase the availability of currently empty strata housing by eliminating a strata corporation’s ability to ban owners from renting their own strata units.
  10. Maintain rent tied to the renter, not the unit.
  11. Work with local governments to develop, implement and enforce short-term rental rules to better protect long-term rental stock.
  12. Make the residential tenancy branch more responsive, accessible and proactive with more opportunities to learn from and educate landlords and renters on their rights and responsibilities.
  13. Improve fairness and consistency of the residential tenancy branch dispute resolution hearings process by recording all hearings.
  14. Improve procedural fairness by expanding review considerations to include more grounds for review.
  15. Require landlords who are filing for eviction for cause, or for renovation, to provide all evidence with any eviction notice to the affected tenants
  16. If repairs are needed to maintain a rental home and the landlord is refusing to make them in a timely way, have the residential tenancy branch proactively reduce the rent of affected tenants until the repairs are completed.
  17. Allow email as a form of notice of service between landlord and tenants.
  18. Speed up the return of damage deposits to tenants by allowing tenants to make a direct request to the residential tenancy branch for the damage deposit where no damage has been found and reported by the landlord.
  19. Work with the insurance industry to see if rent guarantee insurance, and other improvements to insurance coverage, might be provided for landlords in B.C.
  20. Undertake a review to simplify the regulations relating to a landlord’s obligation to store abandoned personal property.
  21. Ensure it is clear for all landlords and renters where to go to get help for all forms of residential tenancy
  22. Address the specific needs of non-profit housing and supportive housing providers in the residential tenancy act.
  23. Ensure manufactured home park rules are clear and understandable. Clarify what occurs when park rules conflict with lease or contract rules.
© 2018 Global News, a division of Corus Entertainment Inc.