Vancouver is the most expensive real estate market in Canada, but it’s only the third-largest city. In light of the Globe and Mail’s explosive story linking the housing market to money laundering and the fentanyl trade, has Vancouver officially become Canada’s Wild West?
The Globe article revealed millions of dollars from the fentanyl trade was being washed in Vancouver real estate, and B.C.’s attorney general David Eby has promised a crackdown. According to Victoria-based Cheri Crause, a province-wide dragnet is being cast because of illicit activities that occurred in Vancouver. For example, the Office of the Superintendent of Real Estate is cracking down on shadow flipping and dual agency.
“It stems from Vancouver, yet it affects every realtor in B.C.,” said the Royal LePage Coast Capital Realty sales agent. “I don’t have a problem with the changes to dual agency, but they’re asking for recusal on so many things and it makes it so difficult when you deal in a smaller centre. All of the bad things that happen in Vancouver affect the whole province. We don’t see that kind of stuff in Victoria, but the rules will be changed and it will make our lives more difficult. Consumer choice will be taken away all because of what’s happening in Vancouver.”
Crause added that regulatory measures might be overkill because criminals—and others with nary a qualm about circumventing rules—will simply keep ignoring them, but those who play fair will have to abide even more rules.
“If the activity [washing dirty money in real estate] is widespread, it needs to be investigated because I don’t think it’s right, and I certainly think it gives a bad name to all of us,” she said. “What’s been going on in Vancouver affects all of the realtors in B.C., even though we don’t control it.
“If it’s criminal activity, criminals find ways around things anyway. In the meantime, they change the rules for people who are already following the rules. Changing the rules doesn’t stop people who don’t follow rules to begin with.”
McKay Wood, a mortgage broker with Verico Mortgage Pal in Vancouver dismisses the notion that nefarious activity alone is having substantial impact on the city’s exorbitant housing prices—he attributes that to supply and demand.
But he thinks there’s merit to a committee investigating the real estate sector because a few bad apples can render it untenable.
“By and large, it’s not the majority, it’s the few bad apples,” he said. “I’m all for playing above board and keeping everything legitimate. It keeps our industry safe and allows people who are diligent and have a moral compass like the majority of the industry to act fairly and play fairly.”