[Flash Walken]

Originally Posted by squiggs96

A big problem with the rental market here is airbnb. Units that could go towards long term rentals, are being used as short term rental, further diluting the supply from the open market. Airbnb is basically illegal in Vancouver, unless you have a hotel and/or bed and breakfast license. Many stratas are redundantly prohibiting short term rentals in their bylaws. Unfortunately, these aren't being policed very well.

Another problem is the NIMBY crowd. The solution to cheaper housing and rentals, is to increase density, and thus the supply of both. Too many times in Vancouver people are crying over the prices of houses. These are the same people that don't want to live in a condo/townhome, and don't want towers in their neighborhood. There have been many towers that have been delayed, or outright cancelled, because residents in the neighbourhoods stop them. Then they go to the papers and say how they can't afford to live here. You can't have it both ways, people.

I would like to see more houses both up, and replaced with increased density. When this happens, there will also need to be increased infrastructure and transit to get the people around. People need to travel on transit, cycle, or walk more than they drive. This will reduce traffic, and make it more efficient.

I don't agree about density though, I don't believe this is a supply issue. If there were more supply there would simply be more turnover.

This is honestly like first year economics, and this hot market is obvious for the corruption that is between private developers and government regulators and policy makers.

Take this article for example:

A debate about supply and demand is not something people typically worry about. In the debate about housing affordability in Toronto and Vancouver, though, you should. If we misdiagnose the cause of the surge in prices, policy action may not only fail to fix the problem – it may make it worse.

Influential voices in the real estate industry in both cities have adopted the position that sharply rising prices are the result of housing supply constraints. In Vancouver, that position is expressed most loudly by Bob Rennie, a prominent condo marketer. In the lead-up to his annual address to the Urban Development Institute, a developer-funded group, Mr. Rennie repeatedly stated that the problem was “all about supply” and that he opposed any actions to curtail or regulate foreign demand for Vancouver housing.

This is the same line taken by the British Columbia government (perhaps not coincidentally, some say – Mr. Rennie is the provincial Liberals’ lead fundraiser). When the Toronto debate reaches the same intensity as Vancouver’s, this will be a tempting position for the Ontario government to adopt, too. So it’s important to understand the weaknesses of these arguments in the Vancouver context.

Consider the claim that it’s “all about supply.” This claim suggests that we are not building enough new housing to meet the demand from a growing population. But is there any evidence of that? No. In fact, the ratio of population to housing units in Greater Vancouver has been falling for the past 20 years or so. Even the UDI said in a late 2015 report that housing starts were in the “healthy range” given population growth, and had been for several years. And housing starts have surged recently, to their highest point in over 25 years, even while net migration (international and domestic) into Vancouver has declined somewhat in recent years.

So how can a spike in housing prices, including condo prices, be explained by supply? As anyone with a basic familiarity of Economics will tell you, they can’t. It has to be a surge of demand.

In industry-oriented publications, the UDI recognizes it’s not mainly a supply problem, but with the general public, in order to press the developer agenda, the problem is suddenly “all about supply.”

This is why almost anyone without a vested interest in the supply story isn’t buying it. Leading national columnists and academics have dismissed this view, recognizing the central role of foreign demand. Canada’s big banks, which might have money at stake if they get the diagnosis wrong, are also being clear that foreign demand is a major issue and urging policy action to regulate it.

The Bank of Nova Scotia has gone to the exceptional step of curtailing its mortgage lending in Vancouver (and Toronto) because it recognizes the market surge is not mostly based on local fundamentals, such as supply constraints, but rather on large flows of volatile international capital (and the bubble mentality it has generated). The Bank of Canada now seems to be intimating a similar view.

Vancouver does have a longstanding land supply issue, yes. But it can explain neither the recent surge in prices nor the extreme prices relative to the region’s incomes, as I documented in a recent report. The approximately $1-trillion (U.S.) flowing out of China can largely account for the past year’s surge, and a continuous flow of foreign money through the Business Immigration Program can mostly explain the “decoupling” of the housing market from local incomes before that.

Why does the diagnosis matter? Couldn’t rapidly expanding supply bring prices down, too?

Yes, expanding supply dramatically can help bring down prices. But the danger with that strategy is what will happen if all of the “excess” demand suddenly dries up, either because it’s based on a bubble mentality or due to an unsustainable credit bubble in China. In that case, then the housing correction will be even deeper and more damaging.

http://www.theglobeandmail.com/repor...ticle30380106/

Regulatory agencies are on the take as well in BC:

One of Vancouver’s top realtors has been voted out of what he calls the “insiders club” after speaking out about unethical practices and lax penalties in the city’s frenzied real estate market.

Re/Max realtor Keith Roy has been on the professional standards committee of the Real Estate Board of Greater Vancouver since 2014, helping with its private adjudication of complaints, primarily from realtors about realtors.

The Globe and Mail has learned the board voted not to renew Mr. Roy’s position on Thursday. One board member, upset over that decision, has resigned in protest.

“My removal comes at a time when I am publicly advocating for changes to improve ethics and consumer protection,” Mr. Roy said. “I’ve been told someone said: ‘Well, he kind of had it coming for talking.’”

It is another glimpse at unprecedented tensions and power struggles inside Vancouver’s real estate industry, which is under intense scrutiny. Bidding wars, out-of-control prices and flipping by speculators have led to an outcry from clients who suspect they are being ripped off. The practices of at least one brokerage firm, New Coast Realty, are under investigation by the provincial regulator. A government-initiated advisory group is expected to recommend an overhaul of industry rules and practices within weeks.

The board controls access to the MLS system and keeps its disciplinary decisions secret. Its rules also say members who criticize other realtors can be fined.

“It’s an insiders club that doesn’t serve home buyers and sellers. Discipline is too lenient. Secrecy is paramount. Change is far too slow to happen,” said Mr. Roy, who is among the top 10 per cent of Vancouver realtors in annual sales.

By contrast, the self-regulating Real Estate Council of B.C. is government-mandated to act in the public interest by investigating client complaints and publicizing sanctions against realtors.

Mr. Roy is one of a very few to challenge both bodies publicly, calling for tougher fines and licensing standards.

Royal LePage realtor Danny Gerbrandt, the board member who resigned on Monday, said he shares Mr. Roy’s views. He cited the board’s decision to remove Mr. Roy as a last straw.

http://www.theglobeandmail.com/real-...ticle30215834/

Interviews conducted by B.C. Securities Commission investigators and read into evidence in a Securities Commission fraud hearing against Ayaz Dhanani reveal a complex real estate transaction with connections to alleged fraud and organized crime players.

This raises big concerns about Vancouver’s property market and the B.C. Real Estate Act.

In late December 2014 Vancouver realtor Liang Ming Wei walked into the frenetic dining hall of Floata in Chinatown.

With hundreds of diners and waiters racing around with steaming plates of dim sum, the Keefer Street restaurant was perfect for an obscure transfer.

Wei had arranged for three million yuan to be deposited in a Chinese bank and transferred to a Richmond currency exchange. Exchange owner Tony Xu called Wei and told the realtor his client’s cash had arrived and it was converted to $521,470 Canadian.

It was 10 times the legal amount individuals are allowed to transfer from China. And it was 50 times over the $10,000 limit that must be reported under Canada’s anti-money-laundering laws.

Instead of having Wei come to his Richmond location to pick up the cash, Tony Xu said it was better for the realtor to meet his brother Frank Xu in Vancouver. Wei’s client Zhongyun Zhang, a Chinese transportation professional, had come to Vancouver in August 2014 and set up a Bank of Montreal account with Wei’s help.

She had listed his Burnaby home address as her own. And on the title deed of Wei’s home she claimed to be a homemaker. Bank documents said she was a Canadian resident. None of it was true.

In Floata, Liang Ming Wei took three bank drafts totalling $470,000 and a cheque for $50,000 from Frank Xu, all made out to Zhongyun Zhang.

The money was supposed to come from Zhang’s account in China. But one of the bank drafts came from a Vancouver dentist who did not know Zhang, and was victim of an alleged fraud by a man named Ayaz Dhanani.

The other two bank drafts came from citizens who also did not know Zhang.

According to evidence tendered at a B.C. Securities Commission hearing, the financial instruments handed to Wei in Floata had passed through at least five sets of hands. These elaborate transactions occurred because Wei had told Zhang that “no matter what,” she must have $500,000 in Canada to buy a house.

The linchpin in the exchange was Edwin Shek-Yin Cheng, a Vancouver money launderer and loan shark who was well known to Western Canada organized and commercial crime investigators.

In June 2015, six months after the three bank drafts were deposited by Liang Ming Wei into Zhang’s bank account in West Vancouver, Edwin Cheng was found shot dead inside his car outside a Sikh temple in Richmond. Witnesses said assassins pulled up in a black SUV and blasted Cheng’s car with about 20 bullets.

Details of this disturbing case were revealed in the Securities Commission fraud hearing. But the offshore money transfer and real estate activities investigated by The Province were not the focus of the fraud proceedings. What’s more, the real estate activity that apparently drove these transactions is not being probed by B.C.’s Real Estate Council.

NDP MLA David Eby, B.C.’s opposition housing critic, said facts gathered by The Province provide perhaps unprecedented detail and corroboration of similar allegations reported to his office concerning offshore buyers and local realtors.

“I was really troubled by the facts in your case,” Eby said in an interview. “And I’m concerned this is not a one-off situation, and this could be a systemic, regular practice. There is enough information to raise red flags for investigations.”

http://www.theprovince.com/business/...456/story.html

Read that last article in full if you want to start going down the rabbit hole that is international corruption and money laundering in BC.

It's cauldron of #### out here.