The “foreign buyer” and the B.C. government’s infamous tax dominated headlines this year and will continue to in the new year.
That’s according to lawyer Christine Duhaime – an expert on money laundering and Asian real estate investment.
Duhaime says foreign investors are still skirting the rules by driving corporate vehicles like trusts and corporations into the market.
“People will get together and set up a corporation of British Columbia so that it’s a company or companies that are being setup here and then buying real estate to ensure the purchasing entity is quote-on-quote ‘enough Canadian’ not to trigger the tax payment.”
Duhaime says we are now seeing more and more corporate vehicles being setup, driving foreign investment like shell corporations or trusts.
“They can make arrangements so that the person that is buying the home is not the one who shows up on paper as being a foreign national, because a trust is a legal entity in Canada, just like a person.”
And until the province helps banks and realtors grasp money laundering she says it won’t stop.
Even with growth outside the tax boundary, Duhaime says Vancouver is still the number one destination for Asian buyers.
The “foreign investor” was named The Canadian Press business newsmaker of the year.
Where’s the housing market headed?
Meanwhile, ahead of it’s annual forecast which comes out early in the new year, Royal LePage is out with a warning that prices are headed for a double-digit decline in 2017.
Speaking to the Globe and Mail, CEO Phil Soper says the decrease will come as buyers drop out of the market.
So what does that mean for Vancouver’s crazy market?
CKNW Business Analyst Rob Levy.
“Soper says if there’s not a double-digit correction in Vancouver’s housing market, it will be close to it.”
Levy says this comes following steady price gains which hit a lot faster than income growth.
“It’s that lag period too, where we saw activity slow down. It’s been five straight months now where housing activity to slow in Vancouver but we haven’t seen prices start to fall.”
Royal LePage says even a 10-per-cent decrease would only bring prices back to about where they were in March.