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.