August 6, 2015

A Train Wreck In Slow Motion

The Province reports from Canada. “Vancouver International Airport is the major port of entry for millions in hidden cash being smuggled into North America by mostly Chinese citizens, a federal document investigation by The Province reveals. And according to money laundering investigators, the amounts identified in Canada Border Service Agency cash seizure data, obtained by The Province under freedom of information law, is only the tip of the iceberg. ‘A lot of the illicit money coming into Canada from Chinese citizens is laundered through real estate in Vancouver,’ Hayley Labbé, a senior forensic investigator with the firm MNP LLP, told The Province.”

“B.C.-based fraud investigation executive Kim Marsh said he recently started work on a new case involving a Chinese man who absconded with $450 million in corruption money and has been laundering it in Vancouver for a number of years. Marsh said he is uncovering numerous Lower Mainland real estate assets that the suspect purchased with his stolen fortune. ‘This guy is just one of many,’ Marsh said. ‘The evidence is mounting of a lot of grey money coming into Vancouver’s real estate market from China. So we have some serious issues in Vancouver and we need more deterrents. The money seized at YVR is a good example. You pay a pittance of a fine, and it is worth the risk.’”

“Several real estate industry sources have informed The Province they suspect colleagues are turning a blind eye — or even in some cases participating in illegal schemes. However, these professionals say they fear speaking on the record because they could be blackballed by peers, or accused of racism. ‘The people buying these multi-million-dollar properties here in Greater Vancouver don’t care what the asking price is,’ one experienced realtor said. ‘Some are corrupt government officials and insiders, and all they want to do is get the money out of China and use Vancouver to launder the money.’”

The Ottawa Sun. “Whispers of a buyers’ market in Ottawa — unseen in more than a decade in a city once considered recession-proof — are now growing to a roar, in another case where the reality on the ground flies in the face of everything the experts are saying. Martin Elder started selling houses when you could still find a decent home in a nice neighbourhood for under $20,000. ‘It is a buyers’ market, we’re definitely in it,’ says Elder. ‘I have clients in the military, and they were looking at buying in the $500,000 range in the south part of the city a month ago — there were 28 nearly identical properties for them to choose from. When he found a property that pleased him, the seller brought the price down by roughly $30,000.’”

“Another client was recently searching for homes in the Metcalfe area. ‘We had our pick of the conditions — upgrades to the septic tank, fix this, fix that — and the seller did it all, and they knew they had to meet the buyer’s needs.’”

The Western Wheel. “Plummeting oil prices in the fall of 2014 have left Okotoks to deal with an unpredictable – but stable - buyers’ market. In Okotoks, the market is flooded with homes priced between $500,000 to $600,000, providing potential buyers with a number of options in that price range and allowing them to take their time in making decisions. ‘Buyers are able to be picky right now,’ said Evan Perry, realtor with Century 21 Foothills Real Estate. ‘They aren’t pulling the trigger because there’s a lot to consider.’”

The Cold Lake Sun. “As the economy continues to suffer, housing prices in the Cold Lake area continue to fall. If you’re buying a home, it’s good news. But if you’re trying to sell your home, it can be very frustrating. ‘It’s destroyed,’ said resident Dan Kunstmann, who’s been trying to sell his house for a while. Kunstmann says council should shoulder some of the blame for the drop in home prices. ‘They have to see into the future,’ Kunstmann said. ‘You can’t keep building uncontrolled. Even if they looked back into the past, it’s always up and down, pretty drastically.’”

“Kunstmann’s home is one of the 370 currently for sale on the Multiple Listing Service (MLS) in the city alone. Expanding the search to the surrounding rural area adds dozens more. ‘Our house is for sale and we haven’t had a showing in two months,’ Kunstmann said. His house has been on the market since last spring.”

“In addition to all the new construction, Patti Oulette of RE/MAX Cold Lake said some of the supply is former rental housing owners are trying to sell off. ‘People bought houses because of JD driver coming in, which gave us a false market … because they were only here temporarily,’ she said. ‘So a lot of what’s on the market is people that have been transferred and had to leave their house empty, and people who bought those houses and can’t keep both now that there’s no one to rent them.’”

From The Tyee. “Economists, an irrational tribe of short-sighted mathematicians, are now calling Canada’s declining economic fortunes ‘a perfect storm.’ It seems to be the only weather that complex market economies generate these days, or maybe such things are just another face of globalization. But this unique perfect storm gets darker. China, which Harperites eagerly embraced as the globe’s autocratic growth locomotive, has run out of steam.”

“As the country’s notorious industrial revolution unwinds, China’s stock market has imploded. Communist party cadres are now moving their money to foreign housing markets in places like Vancouver.”

“Years ago I warned Canadians and Tyee readers that bitumen would not make us a superpower, or pave our streets with gold. It is a train wreck in slow motion that will surely immolate innocent bystanders. The Uruguayan journalist Eduardo Galeano once wrote that ‘History never really says goodbye. History says, ‘See you later.’ It also says: I told you so.”

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