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[gaming_noob]

Some Canadian banks allow wealthy Asian investors to skirt Chinese law by helping them bring in large amounts of money that is often used to buy real estate in Vancouver.

Financial institutions in the area have flagged more than 8,200 suspicious transactions since January, 2012, the year China began cracking down on citizens they suspect of corruption.

Ninety-six per cent of those transactions were also facilitated by the banks, however, even though the vast majority of that business involved suspected money laundering, according to FinTRAC, the federal agency responsible for tracking money laundering.

These findings, obtained by The Globe and Mail through an Access To Information Request, come as a debate rages over the source of foreign investment and Vancouver’s soaring luxury housing markets. A recent study by Macdonald Realty said 70 per cent of clients who paid more than $3-million for Vancouver houses last year were from China.

It is illegal for Chinese citizens to remove more than $50,000 (U.S.) a year from China without government permission, partly to stop corrupt millionaires from fleeing with their money. But a review of B.C. court cases by The Globe found they have worked around this restriction by sending millions of dollars into Vancouver-area banks through multiple wire transactions of smaller amounts by family and friends.

Banks are legally obligated to report transactions they deem suspicious to FinTRAC, the Financial Transactions and Reports Analysis Centre of Canada, but do not have to stop them or shut down accounts. The agency’s mandate is to gather and analyze those reports. It will not say what percentage involve this type of foreign investment, but said almost none that do are passed on to police.

The data are raising serious questions among legal experts about the effectiveness of federal laws meant to curb money laundering and transnational crime, and shines a light on a system that is time-consuming and expensive for taxpayers.

“The whole regime is a waste of money,” said lawyer Christine Duhaime, an internationally accredited expert on money laundering who has testified before parliamentary committees. “It seems to be completely ineffective.”


In her experience, Ms. Duhaime said, Canadian police do not have the resources to take on these cases.

“I think they also might face obstacles in China because of political differences between the two countries.”

FinTRAC’s guidelines on what banks should consider suspicious include multiple deposits to a client’s account by third parties, a high volume of wire transfers and frequent wire transfers to a client from individuals who do not have an account with the bank.

“I have seen the bank transaction forms, where $50,000 has been wired out multiple times by several people at one bank in China,” she said. “There is so much money that is being made out of immigrants coming from China to Canada, I suspect no one wants to rattle that cage too much.”

Full article: http://www.theglobeandmail.com/repo...s-to-move-money-out-of-china/article26246404/

These banks will crash the Canadian economy and guess who is going to have to pay for the bailouts?

 

[Mii]

The Canadian economy is already fucked from the drop in oil. Just give up Canada, Harper fucked you good.

 

[numble]

If the STR is filed, they shouldn't have a liability. Isn't it up to whatever the Canadian equivalent of Fincen is to review the STRs and order freezes?

 

[Roland_Gunner]

Full article: These banks will crash the Canadi...e how its going to hurt the Canadian economy.

 

[Usobuko]

Super wealthy properties owners in Canada and banks getting even richer at the expense of rising property prices across the board.

Great deal.

If you're at the receiving end.

 

[Walpurgis]

Lol that's embarrassing.

 

[Kifimbo]

By facilitating wire transfers? Helping people evade financial laws is bad but I don't see how its going to hurt the Canadian economy.

Didn't you hear ? Everything is Harper's fault. He even killed that little Syrian boy with his bare hands while standing in a Tim Hortons thousands kilometers away.

 

[Skeyser]

Canada had a good run

 

[linsivvi]

Yeah I don't understand OP's comment.

How is it going to hurt Canada and crash their economy? If anything, this will hurt China instead.

 

[Buba Big Guns]

All this does is increase Vancouver's already ridiculous property values.

 

[Angelus Errare]

Didn't you hear ? Everything is Harper's fault. He even killed that little Syrian boy with his bare hands while standing in a Tim Hortons thousands kilometers away.

lmao fuck, I spit my tea out.

 

[gaming_noob]

Yeah I don't understand OP's comment.

How is it going to hurt Canada and crash their economy? If anything, this will hurt China instead.

I'm thinking about the overall scope here. We are in a recession even with historically low interest rates, meanwhile housing prices continues to rise. When the interest rates go back up to its norm there's going to be hell. It has been speculated that many of the condos and houses are being bought out by foreign investors, kept empty to create an artificial shortage. Believe it or not Canada is not tracking any foreign investment. There are no hard numbers.

 

[oneran]

I'm thinking about the overall scope here. We are in a recession even with historically low interest rates, meanwhile housing prices continues to rise. When the interest rates go back up to its norm there's going to be hell. It has been speculated that many of the condos and houses are being bought out by foreign investors, kept empty to create an artificial shortage. Believe it or not Canada is not tracking any foreign investment. There are no hard numbers.

But that would be assuming that foreign investment is the sole cause for the housing prices situation in Canada. Even if that was correct it would be the Big Banks Fault for over extending credit through mortgages people couldn't afford not by accepting foreign wire transfers. That being said I don't think rates are rising any time soon in Canada.

 

[CyclopsRock]

Canadian banks aren't responsible for enforcing Chinese law, are they? There's no reason to think that they've done anything wrong, is there? Sounds like they reported the transactions to the relevant authority as per the law.

 

[Silver Arrows]

What a surprise

Wouldn't be surprised if by the end of the decade real estate in the GVRD will drive young people like me out past Mission and to somewhere else.

Might as well make plans to move back to Manitoba.

 

[sikkinixx]

What a surprise

Wouldn't be surprised if by the end of the decade real estate in the GVRD will drive young people like me out past Mission and to somewhere else.

Might as well make plans to move back to Manitoba.

The only way I'll afford a house here is for my parents to die and leave me theirs.

 

[Junior Mint]

What a surprise

Wouldn't be surprised if by the end of the decade real estate in the GVRD will drive young people like me out past Mission and to somewhere else.

Might as well make plans to move back to Manitoba.

Most of the talented people I know have already left Vancouver. Wouldn't be surprised to see brain drain at an increasing rate in Vancouver. Who wants to live in a city where you get paid less than in Toronto or Silicon Valley, have far worse career opportunities, while paying more for housing and living expenses? Almost no one who's rich in Vancouver actually made their money in Vancouver.

 

[Extra Sauce]

This seems like a potentiallly good thread to ask this. I'm currently contemplating buying a condo in Montreal, assuming I receive financing from the bank (they haven't agreed yet). Is now considered a good time to buy?

 

[HarryKS]

There's plenty of very,very wealthy Chinese kids that live next to me. They like the good stuff. I envy them. They don't do anything.

 

[TheRagnCajun]

This seems like a potentiallly good thread to ask this. I'm currently contemplating buying a condo in Montreal, assuming I receive financing from the bank (they haven't agreed yet). Is now considered a good time to buy?

Now is a terrible time to buy a Condo in a high population city in Canada.

 

[Extra Sauce]

Now is a terrible time to buy a Condo in a high population city in Canada.

Why?

 

[Silver Arrows]

Most of the talented people I know have already left Vancouver. Wouldn't be surprised to see brain drain at an increasing rate in Vancouver. Who wants to live in a city where you get paid less than in Toronto or Silicon Valley, have far worse career opportunities, while paying more for housing and living expenses? Almost no one who's rich in Vancouver actually made their money in Vancouver.

Agreed. And it's turning into Canada's San Francisco: where you can't build up, and you are restricted to build by land. So you essentially spread out in every other direction.

I remember watching a bit on Global on a construction worker living in Vancouver (Who I assume make pretty decent money) still living with his parents. He looked about mid twenties. He cited the almost impossible to enter housing market for doing what he did. I wouldn't be surprised if more twenty somethings do that through the next little while.

 

[shira]

There's plenty of very,very wealthy Chinese kids that live next to me. They like the good stuff. I envy them. They don't do anything.

I have a neighbor who has been going to university for the last 6 years. Drives a Ferrari and an R8. I guess his major is "winning at life"

 

[Silver Arrows]

I have a neighbor who has been going to university for the last 6 years. Drives a Ferrari and an R8. I guess his major is "winning at life"

There's a reason that this exists.

(Rule of thumb for this blog: Anything 2000 model year or older is probably owned by a teacher)

 

[Tabris]

How is this a bad thing for us? Injecting money into the Canadian economy.

Also for all the doom and gloom - Canada is not in a recession annually. It's looking to still have a 1.2 GDP annual growth. It only contracted in a single quarter. When you have quarter over quarter contractions, that's when you need to really start worrying, it's just not the normal for the Canadian economy. It's not great but it's not the end of the world - this isn't 2008.

Get Harper out and invest in infrastructure spending, and it's an easy rebound to better growth numbers.

 

[TemplaerDude]

Won't be long until it's too expensive for me to even rent in Vancouver.

 

[G.ZZZ]

Super wealthy properties owners in Canada and banks getting even richer at the expense of rising property prices across the board.

Great deal.

If you're at the receiving end.

Turning economy to shit 101.

 

[Tabris]

They just need to tax foreign investment a bit more. Need to balance getting more money from foreign investment (and recycle that back into the economy via infrastructure spending) without scaring it away. Harper has been hands off on taxing them, but I think NDP or Liberals may approach it slightly different. We'll see.

 

[Tabris]

Also they really need to push the market to increase salaries on the mid-end, not just minimum wage. Unless you work for a US-based company, Vancouver's salaries are not comparable to similar world-class cities and that's the real discrepancy.

We're bringing in the companies slowly into Vancouver and Toronto, but the salaries aren't increasing and that's because it's still an employers market then employees. The talent is here, but the talent is willing to accept lower salaries in Vancouver.

Our cost of living is in 2015 Vancouver, our income is in 2000 Vancouver (before it was a world-class city). I assume Toronto is the same. Both cities have seen a drastic change over the last decade thanks to that foreign investment.

 

[AlphaTwo00]

How is this a bad thing for us? Injecting money into the Canadian economy.

only if they really participate in the economy by injecting the cash. If they're just parking the money here or buying up property (the most obvious case), sure it's injecting money, but the general population gets the side effect of getting priced out.

 

[anaron]

everything is so fucked here right now

 

[Shining Sunshine]

Won't be long until it's too expensive for me to even rent in Vancouver.

Vancouver is literally New China. Real Estate is all controlled by the mainlanders buying up everything.

My friend told me he sold his graveyard plot for $120 thousand (12 times for what he paid) to a Chinese mainlander. They just want to buy everything before their money is useless.

 

[Dr.Guru of Peru]

Won't be long until it's too expensive for me to even rent in Vancouver.

You're probably OK. Well, maybe.

Rental rates have upwards pressure, but at no where near the same rate as real estate costs. There's only so much that you can increase the rental rate without increasing the average wage. The same doesn't apply to real estate, since most of the upward pressure is coming from foreign investors who are looking to park their money (and obviously don't earn a wage in the city).

With that being said, there needs to be greater controls and oversight on foreign purchasing of real estate. There's too much money being bandied about - some of it has got to be dirty.

 

[grumble]

The Canadian economy is already fucked from the drop in oil. Just give up Canada, Harper fucked you good.

Yeah that isn't harper's fault. We've always been a commodity exporter.

Not saying he is a good pm, but I've heard the above several times and it's wrong. He supported the oil industry and helped it grow, as do many countries, but he didn't create it by any means and isn't responsible for the issues out west. That is due to fracking and a sluggish global economy.

His issues lie more with his regressive social policies and some questionable fiscal priorities.

 

[Junior Mint]

How is this a bad thing for us? Injecting money into the Canadian economy.

lol @ the thought of mainlanders injecting money into the economy. Unless you think it's a good thing for the entirety of Vancouver's economy to move to restaurants and luxury fashion like what's happening in Hong Kong.

 

[Zekes!]

My question has always been: what draws them to Vancouver?

 

[grumble]

only if they really participate in the economy by injecting the cash. If they're just parking the money here or buying up property (the most obvious case), sure it's injecting money, but the general population gets the side effect of getting priced out.

That money goes into the accounts of the people that sold them the house, which them goes to other things in the economy like investing in companies, buying things, hiring people, etc.

Not saying it isn't an issue but it's a free country and people can sell to whoever they want. What should happen is an empty house tax and additional construction permits.

 

[Junior Mint]

My question has always been: what draws them to Vancouver?

Well for one, the population is like 50% Asian/Chinese.

 

[Dr.Guru of Peru]

My question has always been: what draws them to Vancouver?

They need some place to park their money overseas.

Canada has cheap housing (for Chinese standards), reputation as a stable housing market with solid yearly appreciation, and lax laws. It's also seen by some as a more favourable place to park their money due to general Chinese distrust towards the USA. Vancouver also benefits from familiarity.

 

[vern]

Wiring money in this way isn't really a big deal or uncommon. I work in China with wealthy Chinese and that's the way they have to move their money due to the rules here. Most Chinese investors who want foreign currency just call up 10-20 friends and transfer rmb to their account then have them purchase the foreign currency. There is a shitload of corruption here yes, that's true, but also there are lots of legit business people who don't want all their money tied up in RMB so they purchase foreign currency. The exchange limit is pretty dumb.

It's also the same thing I do when I want to buy USD. There is a daily limit of 500 usd for foreigners in China to exchange, unless you wanna jump through a bunch of hoops with tax forms and paperwork. I just ask a Chinese friend to go to bank with me, I withdraw my cash and then let the Chinese person exchange to dollars for me.

Banking here sucks and things like in op, having friends help you to exchange money, do not indicate money laundering or fraud necessarily, it's just the method that you need to follow in order to move your money overseas.

 

[Tabris]

lol @ the thought of mainlanders injecting money into the economy. Unless you think it's a good thing for the entirety of Vancouver's economy to move to restaurants and luxury fashion like what's happening in Hong Kong.

I do think it's a good thing. Those are features of world class cities. We just need the local economy to catch up.

only if they really participate in the economy by injecting the cash. If they're just parking the money here or buying up property (the most obvious case), sure it's injecting money, but the general population gets the side effect of getting priced out.

Except it's not the case of "dead money". Well it is, but for the Chinese economy. The issue with trickle down economics is most of the time the money sits dead instead of trickling down. While in this case, the money isn't dead as it's being fed into our housing market which creates construction jobs, real estate jobs, etc. It directly feeds the economy. The negative is it increases the value of real estate via that "artificial" demand thus pricing out some local citizens.

The solution is not to prevent this, but to look how we can better have the real estate boom reflect into the local market via things like taxation. Increasing foreign ownership taxes slightly will help that if it's fed back into things like infrastructure spending. The next is instead of only looking at minimum wage, we also need to determine how not to just increase jobs here (there's lots of jobs in this market) but increase the income from those jobs to better reflect the growing changes of these cities and country.

It's a balancing act between regulation and government taxation & investment, while ensuring not to drive away that foreign investment or businesses.

Right now we are on the extreme side of letting foreign investment and businesses in with little cost due to the conservative government. That needs to change, but it can't also go the other way too quick.

 

[Tabris]

Well for one, the population is like 50% Asian/Chinese.

Yes, that helps and I also love it. I would prefer a greater diversity within the Asian community though since a huge percentage are Han Chinese (or "Mainlanders").

They need some place to park their money overseas.

Canada has cheap housing (for Chinese standards), reputation as a stable housing market with solid yearly appreciation, and lax laws. It's also seen by some as a more favourable place to park their money due to general Chinese distrust towards the USA. Vancouver also benefits from familiarity.

This first statement is completely off base. The only housing market in China that comes close to Vancouver is Hong Kong. Which does exceed it as the most unaffordable city in the world, but the rest are quite affordable.

Vancouver has proven to be a very stable market with solid yearly appreciation, this is a huge factor. It's funny since most Vancouverites have been calling it a bubble for 15 years. This has caused so many not to invest when they could have been benefiting from this growth.

One of the big reasons - Canada is the most admired country in the world statistically. See this for all the stats:

http://www.neogaf.com/forum/showthread.php?t=1080350

 

[yongeandcollege]

Yep.

If I had the choice I'd pick somewhere with a 50% Asian American population to live. Familiar food, familiar customs, familiar faces. Would never have to worry about feeling like a minority.

It's comfortable and safe. It makes sense. I mean, tons of people in this forum dislike the idea of living with so many "foreigners" and to many of them it's by virtue of skin color not actual citizenship. Why be surprised when they feel the same way as you? Lol

Really? What's your definition of tonnes?

 

[numble]

Yes, that helps and I also love it. I would prefer a greater diversity within the Asian community though since a huge percentage are Han Chinese (or "Mainlanders").

Taiwanese and Hong Kongers are Han Chinese.

This first statement is completely off base. The only housing market in China that comes close to Vancouver is Hong Kong. Which does exceed it as the most unaffordable city in the world, but the rest are quite affordable.

That's really not true and completely off base. You must be basing it on this report, the Demographia International Housing Affordability Survey:
http://www.demographia.com/dhi.pdf

The survey was quoted in news reports as putting Vancouver second to Hong Kong. However, it:

• Does not cover metropolitan areas in China other than Hong Kong--it only covers Hong Kong
• References other surveys that put Shenzhen, Beijing and Shanghai above Vancouver

That also doesn't account for the fact that wealthy Chinese aren't interested in the "ordinary" housing that make up most of these markets (where you might not be able to flush toilet paper without worrying about clogging, etc), and upscale real estate is much more pricey compared to Vancouver.

 

[Dr.Guru of Peru]

Yes, that helps and I also love it. I would prefer a greater diversity within the Asian community though since a huge percentage are Han Chinese (or "Mainlanders").



This first statement is completely off base. The only housing market in China that comes close to Vancouver is Hong Kong. Which does exceed it as the most unaffordable city in the world, but the rest are quite affordable.

Vancouver has proven to be a very stable market with solid yearly appreciation, this is a huge factor. It's funny since most Vancouverites have been calling it a bubble for 15 years. This has caused so many not to invest when they could have been benefiting from this growth.

One of the big reasons - Canada is the most admired country in the world statistically. See this for all the stats:

http://www.neogaf.com/forum/showthread.php?t=1080350

Numble posted some more stuff up above to prove it, but I know for a fact that Vancouver real estate gets marketed towards Chinese buyers because it is "cheap".

 

[AlphaTwo00]

The negative is it increases the value of real estate via that "artificial" demand thus pricing out some local citizens.

The solution is not to prevent this, but to look how we can better have the real estate boom reflect into the local market via things like taxation. Increasing foreign ownership taxes slightly will help that if it's fed back into things like infrastructure spending. The next is instead of only looking at minimum wage, we also need to determine how not to just increase jobs here (there's lots of jobs in this market) but increase the income from those jobs to better reflect the growing changes of these cities and country.

It's a balancing act between regulation and government taxation & investment, while ensuring not to drive away that foreign investment or businesses.

Right now we are on the extreme side of letting foreign investment and businesses in with little cost due to the conservative government. That needs to change, but it can't also go the other way too quick.

This is a fair and detached look at the situation, but it does not reflect the reality where young people (like many on this forum) is priced out of the market and have no relief in sight. I'm seeing more and more friends that are house poor despite moving far away and still getting nailed by rising prices.
I can't and won't blame the current housing situation on forgeign investment, but it's definitely a factor and needs better ways of alleviating the problem as soon as possible.

 

[numble]

Numble posted some more stuff up above to prove it, but I know for a fact that Vancouver real estate gets marketed towards Chinese buyers because it is "cheap".

Another reason why the above "affordability" criteria is flawed and misleading is because it is based on average house size. So Hong Kong is measured based on how affordable the average house of 485 square feet (45 square meters), while Vancouver is measured based on a house size about 2000 square feet.

So that is another reason why they can see Vancouver as "cheap", when they are getting almost 4 times as much property.

 

[Walpurgis]

Really? What's your definition of tonnes?

Go into any Syria thread and you will see.

 

[Pterion]

Hardly surprising news. Love Vancouver as a city, but I find it disheartening that Canadians are essentially being priced out of their city, and not much is being done about it.