In attempt to control Western Canada's Housing Prices, BC Gogernment bans Real Estate "Shadow Flippi
19 replies, posted
[quote]The B.C. Government says it is ending the practice of shadow flipping in Vancouver’s real estate market.
Speaking in Stanley Park Friday morning, Premier Christy Clark said they are not waiting for a review of shadow flipping to be done – they are moving to end the practice now.
Shadow flipping is controversial. It involves brokers reselling a property multiple times before a deal closes and profiting from each transfer using the assignment clause in sales contracts.[/quote]
[quote]“In a fast-rising market, some individuals seek to profit at the expense of homeowners and buyers,” said Clark. “Today’s steps address immediate concerns while the Real Estate Council’s independent advisory group conducts its review and brings forward further recommendations on practices in the market. We will work with the City of Vancouver, and then other local governments and the UBCM, on housing affordability issues such as supply and taxation.”[/quote]
[url=http://globalnews.ca/news/2586433/watch-bc-premier-set-to-make-announcement-on-housing-affordability/]**SOURCE**[/url]
Too bad it won't help. In related news it was also announced today that [url=http://www.cbc.ca/news/canada/british-columbia/fintrac-realtors-realestate-vancouver-1.3497796]quite a few Real Estate companies in the region were not in compliance with anti-money laundering regulations.[/url] Nothing is gonna fix this problem short of actual restrictions on international buyers.
[editline]Mad Chatter[/editline]
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NOT FUCKING g, ffs.
It's a start at least.
[quote]Shadow flipping is controversial. It involves brokers reselling a property multiple times before a deal closes and profiting from each transfer using the assignment clause in sales contracts.[/quote]
Is there a more layman's explanation to this? I still don't quite understand what shadow flipping is.
[QUOTE=Emperor Scorpious II;49962813]Is there a more layman's explanation to this? I still don't quite understand what shadow flipping is.[/QUOTE]
From what I gather, there is a clause that lets a broker offer the house to someone else conditionally for if the deal falls through, and the seller often takes the contract offer because it's a quick sale, then that person, often a broker, sells the contract for even higher to another and so on, but the seller still only gets paid the initial price, and the final buyer has to pay all the taxes + an overinflated cost
So the brokers are jacking up costs which is net good for them, they're collecting massive tax free commissions, and both the initial seller and final buyer are screwed over by this
It won't help with the Chinese buying property to stash money though
They will need to ban Chinese internationals from purchasing any real estate, or make it completely infeasible to reasonably turn a profit, if they expect to make any headway with that joke of a market.
There's a reason they call it Hongcouver.
People on the street and, meanwhile, tons of place going are empty because they just happen to be more convenient for some shady party member to use to not disclose his funds to the rest of the people of China. All in all, housing is fucked. Thank god my mom doesn't believe in kicking a person out right at 18 like how it used to be.
There is a direct correlation between house prices and interest rates. Those houses prices will stay high until the interest rates go up.
Your comment about international buyers just sounds like claims of "its them foreigners fault!"
[QUOTE=download;49963909]There is a direct correlation between house prices and interest rates. Those houses prices will stay high until the interest rates go up.
Your comment about international buyers just sounds like claims of "its them foreigners fault!"[/QUOTE]
That's the issue, because it's actually a [B]very real[/B] problem (Vancouver has been gentrifying non-stop at an accelerated pace for the last couple decades; the 2010 Olympics made it even worse) but talking about it opens you up to accusations of racism because the primary perpetrators (and targets) are Chinese nationals -- because they're actually doing this.
It's not racist when it's really happening; tons of houses are empty most of the year and in foreign (predominantly Chinese) ownership, while sky-high rent/sale prices drive actual residents away from the city, sapping its economy and making everyone's commute infinitely worse.
[QUOTE]The average price of a single-family detached home is $1.26-million, higher than any other Canadian city.[/QUOTE]
[URL="http://www.theglobeandmail.com/report-on-business/vancouvers-real-estate-boom-the-rising-price-of-heaven/article21071391/"]2014 source[/URL]
I have no beef with Chinese people. Canada is a multicultural society and I was raised to be respectful to other people, and Chinese are not excluded. But I have a problem with rich Chinese turning the largest city near me and a lynchpin of the region's economy into a giant Monopoly board where every other square is Boardwalk with a hotel on it and that problem is not that they were born Chinese.
It seems to me that the only person getting screwed on the deal is the initial seller. It also seems like real estate agents doing this sort of thing would quickly get a very bad reputation.
I don't see how banning this is going to bring prices down at all. The agent will just sell at maximum value right away.
I really want to move to Vancouver one day, but the real estate market is making that completely impossible. The city Maya's well become a colony of China at this point because soon they'll be the only ones who own any property there.
nice attempt, but this should have been done years ago
[QUOTE=Worstcase;49963171]They will need to ban Chinese internationals from purchasing any real estate, or make it completely infeasible to reasonably turn a profit, if they expect to make any headway with that joke of a market.[/QUOTE]
We can't. We kinda screwed ourselves over.
A decade ago we formally apologised for the [url=https://en.wikipedia.org/wiki/Chinese_head_tax_in_Canada]Chinese Head Tax[/url] so morally we can't turn face on that decision without looking bad.
On top of that China is one of our main importers of ore, coal and natural gas. There's a very real fear China will twist our economic arm should we try and clamp down on their shady practices or cut our economic ties completely which would be a disaster as Harper spent most of his time whoring the country out to them.
Maybe I shouldn't move to Canada after this election. I just don't know enough of what's going on.
Stay in the East coast if you can. It's been economically dead since the 90's when the coal and cod industries collapsed. Houses there are still impossibly cheap compared to West of Quebec...though there's equally not as many high-paying jobs unless you want to work out on Hibernia.
[QUOTE=download;49963909]There is a direct correlation between house prices and interest rates. Those houses prices will stay high until the interest rates go up.
Your comment about international buyers just sounds like claims of "its them foreigners fault!"[/QUOTE]
Please don't insert racism into this unless you're aware of how this area works. It has nothing to do with racism, or keeping foreigners out. It has everything to do with there being a large, large number of properties owned by foreigners, who live in them for a month out of the year, if that. They have driven the prices up so high, that this house right here is worth over a million dollars.
[IMG]http://www.vancouversun.com/cms/binary/10897117.jpg?size=620x400s[/IMG]
We're the #1 most desirable place for chinese nationals to come according to the Hong Kong journal. We have a problem.
It's not as simple as you make it out to be.
Its kinda sad that the only way I'd be able to live in the nicer part of our Country is to become as rich as the Chinese nationals that did whatever to the housing market there.
[QUOTE=download;49963909]There is a direct correlation between house prices and interest rates. Those houses prices will stay high until the interest rates go up. [/QUOTE]
Something doesn't match your criticism when the average Vancouver household needs a six figure income to afford and sustain a healthy mortgage (that includes things like a financial buffer and healthy credit), yet [url=http://www.payscale.com/research/CA/Location=Vancouver-British-Columbia/Salary]the average salary in the region is between $40000 - $75000[/url]. Many of us don't own the land we stand on. We pay rent. Extremely expensive rent.
I don't know anyone in Vancouver who owns their own place unless it's their parents' place that's been in the family for 30+ years. Everyone I know from there rents and has zero hope of ever owning a place in the GVRD unless they mortgage themselves up to their tits for a place in Langley or further out - and that's kind of not really "in" Vancouver anymore.
My family bought our house 5 years ago for half a million. Now it is almost worth more than a million. My dad died, so now it is just me and my mom with a mortgage and a ridiculously quickly rising house insurance rate. If we can't keep the house chances are we have to move to the very edge of the city (If we are lucky), or otherwise to some crime ridden area. Yeah, I'm not a fan of these inflating prices.
My ex-roommate moved 6 hours away to Kelowna because he can afford to rent a whole 3 bedroom house for less than him and I paid a month for our 800sq.ft. apartment.
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