It’s incredibly easy for transnational criminals to use Vancouver condo offshore presales to launder their dirty money. It can be accomplished in just three steps:
Step 1: Buy a presale contract at an offshore sale using dirty money in the offshore currency and hold on to it for a couple of years
Step 2: Flip it to a Canadian buyer for double what you originally paid for it and get paid in Canadian dollars
Step 3: Pay the developer back and walk away with a clean million Canadian dollars instead of dirty offshore currency
We know for a fact that Westbank, Onni, Concord Pacific and other big developers market Vancouver condos offshore. In Westbank’s case, we know buyers from China are able to get a hold of a presale by putting a 10% down payment in the Chinese currency renminbi1)http://archive.is/oK32r.
We also know that many of these offshore presales are flipped to local buyers2)https://thinkpol.ca/2017/10/23/westbank-pre-sold-nearly-1-in-4-kensington-garden-condos-heavily-marketed-overseas-to-flippers/. The prices of these condos have sometimes doubled between the time they were sold in an offshore presales event and the time they’re flipped to locals close to completion.
Imagine the scenario where a transnational criminal who bought a Westbank offshore presale contract for RMB 700,000 (approximately CAD 130,000) in dirty money for a condo worth $1.3M in 2016.
The criminal could easily flip it for around $2.5M, given that condo prices have risen by 35% year-over-year since. After paying back the developer the $1.3 million, the criminal would be walking away with a clean million dollars Canadian. Like magic, a little bit of dirty offshore money has turned into a lot of clean Canadian money.
If it’s child’s play to launder money through presales, just how prevalent is it?
Only the real estate industry knows the answer and they don’t want us to find out. There’s no transparency whatsoever regarding offshore presales at the moment. The industry has a history of trying to silence anyone who dares to even offer a glimpse into the murky world of offshore presales3)https://www.huffingtonpost.ca/daniel-tencer/why-are-realtors-trying-to-stop-us-from-knowing-the-facts-on-housing_a_23293390/.
The provincial probe into dirty money in real estate is a major step forward. But it’s time for City of Vancouver to set up a Vancouver Police Department real estate crime unit. We need to thoroughly investigate offshore presales, and all other forms of questionable real estate practices that have turned our housing market into one giant laundromat for global dirty money.
Global dirty money being laundered in our real estate market is a major cause of the housing crisis that heaping misery on hundreds of thousands of our citizens. The sooner stop criminals washing their proceeds of crime in our housing market, the sooner we can make our city affordable to locals again.
I’m running for Vancouver City Council with ProVancouver to free Vancouver from global greed and make the City Hall work for citizens again. Please support me by voting for me and making sure you friends also vote for me. I’m the second from last on your ballot.
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