Archive for April, 2016

Venue is a new residential project that comprises 141 homes ranging from studios to units with two bedrooms and a den.

Wednesday, April 20th, 2016

Emma Crawford Hampel
Van. Courier

The real estate market in Vancouver is going through the roof, and this is expected to continue through 2018, according to a Central 1 forecast released April 19.

So far this year, Central 1 said, sales in Metro Vancouver alone have outperformed the credit union’s previous forecast, released in late 2015. Central 1 senior economist Bryan Yu said sales will likely increase 22 per cent across the region this year, while the median price grows 13 per cent to $668,000. For detached homes, the median price is forecast to grow 23 per cent to over $1.1 million.

“The dream of a single-family detached home in Metro Vancouver is going to remain just a dream for most buyers,” Yu said.

A lack of land and soaring prices are leading to increased density, and the number of detached homes is dropping.

“Detached homes make up a shrinking share of the housing stock and increasingly are no longer single-family dwellings as many now have rental units, legal or otherwise,” Yu said.

The report said the impact of foreign ownership will stay concentrated in the luxury market, but “does have ripple effects on the rest of the housing market as high-income households move down-market, lifting prices.”

Last week, the British Columbia Real Estate Association announced a record 12,560 homes were sold across British Columbia in March, shattering the province’s previous record of 11,683 units.

Throughout B.C., both unit sales and home prices are expected to increase over the next couple years, the forecast said. In 2016, resale transactions are set to climb 17 per cent to 109,500 units, while the median price is expected to rise 10 per cent to $473,000. The number of units sold in 2017 is expected to stay around the same, at about 109,000 homes, but prices are expected to grow 4.7 per cent.

In 2018, the median home price in B.C. is forecast to increase a further 3 per cent to reach $508,000.

“Red-hot housing demand in Metro Vancouver and an up cycle on Vancouver Island will continue to underpin provincial housing momentum,” said Yu.

Sales in northern parts of the province will remain slow as a result of low oil and commodity prices hurting local economies.

© 2016 Vancouver

BC sales boom to new record for March

Monday, April 18th, 2016

Steve Randall
Other

Sales of homes in British Columbia were up 38 per cent in March compared to a year earlier to hit a record 12,500 units sold through the MLS and it’s not just Vancouver that’s booming.

“Housing demand has never been stronger in the province,” said Cameron Muir, BCREA Chief Economist. “Most large population centres of the province are now experiencing record levels of housing demand.”

However, listings are well behind demand with many parts of the province reporting their lowest inventory in a decade.

Year-to-date figures show a 70.1 per cent rise in sales in dollar terms to $21.59 billion with the average MLS price up 22.2 per cent to $770,408. Sales are up 39.2 per cent to 28,028 units.

Copyright © 2016 Key Media Pty Ltd

Vancouver homes to hit $5 million analysis shows

Monday, April 18th, 2016

Steve Randall
Other

A single-family home in Vancouver could reach an eye-watering $5.1 million by 2026 if current conditions continue. That’s according to analysis of trends over the past three years by HuffPost Canada which found that single-family homes in Toronto could reach $3.58 million.

If trends continued and there was no intervention from the government or other major economic factors, then the cost of upgrading from a condo would also be out of the reach of all but the wealthiest. HuffPost calculates that upgrading in Toronto would cost as much as $2.95 million for average properties, compared to the $758,000 it costs now. In Vancouver, upgrading costs around $879,000 now but could surge to more than $4 million in ten years’ time.

Copyright © 2016 Key Media Pty Ltd

Real estate board shares recommendations with Independent Advisory Group that could impact agents.

Friday, April 15th, 2016

Justin da Rosa
Other

“BCREA fully supports the IAG’s work, and any measures that improve consumer trust and Realtor professionalism,” BCREA President Deanna Horn, a Langley Realtor, said. “I’m pleased to say that most of the 20,000 REALTORS® in the province take pride in representing their clients ethically and honestly. When that doesn’t occur, we encourage consumers and REALTORS® to make complaints.”

The IAG has been tasked with reviewing British Columbia’s real estate industry. It has suggested higher fines  and the abolition of deals in which an agent represents both the buying and selling parties.

“Public confidence in the integrity of the real estate services sector and its regulation has been shaken,” IAG head Carloyn Rogers said in a letter to B.C.’s Real Estate Council. “The public has rightfully questioned whether the self-regulatory powers granted to the real estate services industry continue to be appropriate and whether the industry is adequately fulfilling its obligations under this regime.”

BCREA’s suggestions include encouraging the Real Estate Council of BC to expedite complaints and the discipline process against agents; increase council fines; launch mandated education courses for agents; make buying contracts mandatory for lawyers and notaires subject to the same proposed restrictions for licensees when it comes to assignments.

“We look forward to the final report of the IAG,” Horn said. “This process is positive, and we expect benefits for real estate licensees and consumers.”

Copyright © 2016 Key Media Pty Ltd

 

BC Home Sales Post All Time Record in March 2016

Friday, April 15th, 2016

REBGV
Other

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Chinese buyers hungry for Canadian homes with inquiries up 134%

Thursday, April 14th, 2016

Katia Dmitrieva
Other

Chinese investors are getting hungrier for real estate in Canada, where foreign demand has fueled record price gains and made million-dollar homes the norm in cities such as Vancouver.

Inquiries for Canadian homes on  Juwai.com, a property search engine that lists real estate around the world for Chinese buyers, jumped 134 percent in the first quarter from a year earlier, according to the Shanghai-based company. The figure tracks the total number of queries sent to the agent, developer, or seller of a Canadian property listed on the website.

The increased interest indicates that Chinese investors may be seeking to move money abroad amid instability in the country’s economy and stock market, even as the government clamps down on capital flight. A Juwai survey of real estate agents who work with mainland Chinese buyers found that 55 percent expected international property purchases to increase as people sought a safe haven for cash. Canada, particularly the cities of Vancouver and Toronto, has long been among the top targets for property investors from the Asian country.

“Barring any big changes in the environment, we expect Chinese investment in Canadian real estate to increase in 2016, and the impacts of that investment to be spread more widely as these buyers move into new markets,” Charles Pittar, Juwai’s chief executive officer, said in an e-mail. If the government loosens capital controls at any point, “you can expect more Chinese investment in international property markets,” and Canada could get a share of those funds, he said.

China’s Shanghai Stock Exchange Composite Index has tumbled more than 40 percent from a June high and in August the country unexpectedly devalued its currency. President Xi Jinping earlier this year tightened the noose to prevent capital outflows, and the country has rules that Chinese citizens can move only $50,000 abroad annually, yet those are sometimes flouted.

“Sure it’s tough to get your money out today. It may be tougher tomorrow,” said Thomas Davidoff, associate professor specializing in real estate at the University of British Columbia’s Sauder School of Business. “Vancouver is attractive. In the long run, your asset is protected. You feel safe about the asset, which is going to be critical to somebody in” a country such as China.

Vancouver Demand

In Vancouver — where the average home price has jumped almost 40 percent in five years — Chinese demand is concentrated in the luxury market, according to Malcolm Hasman, a high-end real estate agent in the city. Chinese buyers this year have purchased about three-quarters of the properties for sale in West Vancouver, where the average price of a detached home is C$3.1 million ($2.4 million).

Hasman said he has sold about 15 homes worth at least C$8 million each so far this year, including a waterfront 6,600-square-foot (600-square-meter) penthouse in the Coal Harbour neighborhood, listed at C$19.8 million.

“This year is busier than last year,” said the agent, who said it’s common for him to see multiple bids on homes as pricey as C$10 million. “I just don’t see any slowdown in Chinese money driving the Vancouver market.”

Chinese investment also has soared in countries such as Australia and the U.S. Chinese investors doubled purchases of commercial and residential real estate in Australia to $18.4 billion in the 12 months through June 2015 from a year earlier, according to that country’s Foreign Investment Review Board. In the U.S., they surpassed Canadians as the top foreign buyers of homes, with $28.6 billion of deals in the 12 months through March 2015, data from the National Association of Realtors show.

Toronto, Quebec

The total value of all Canadian properties that Chinese made inquiries for almost tripled to $14.9 billion in 2015 from $5.6 billion in 2014, according to Juwai. The top city by total value of properties searched was Toronto, where it more than tripled to $7.4 billion. In Vancouver, the second-most in-demand city, it more than doubled to $2.5 billion.

Quebec had the biggest jump in interest, with $764 million searched, more than triple the 2014 value. The biggest motivator for foreign buyers was education for their children, Juwai’s data show. In British Columbia, where the biggest city is Vancouver, about one-fifth were motivated by investment, lower than the 26 percent of Toronto buyers.

Canada is trying to find just how much foreign investment exists in the real estate market. Canada Mortgage & Housing Corp., the national housing agency, estimates that about 10 percent of new condominiums bought in downtown Toronto belong to non-residents. In Vancouver, Chinese buyers account for about 33 percent of the market, according to “back of the envelope” calculations by National Bank of Canada.

The government has increased its focus on the opaque market. The province of British Columbia will require home buyers to disclose their citizenship, while the federal government has given Statistics Canada half a million dollars to research foreign buyers. CMHC has ramped up its search for the data, working with brokerages, the tax agency, and the country’s money laundering police.

Copyright © 2016 Key Media Pty Ltd

Shanghai buyers get ahead of locals via website

Wednesday, April 13th, 2016

Steve Randall
Other

Real estate buyers in Shanghai are being given a jump on Vancouverites by getting an early view of MLS listings. That’s according to a report from the Vancouver Sun which says that Vanfun.com lists properties in Chinese ahead of their appearance on the MLS public site in Canada.

The report suggests that the Chinese site has listings data when local agents do but there is a lag of a few days before this is public on realtor.ca. It also says that the site connects with local real estate agents and takes a commission for the introduction.

The Real Estate Board of Greater Vancouver told the Sun that it was aware of the site and is reviewing it. Although it is currently unclear whether Vanfun.com is operated by a licensed realtor, REBGV warned that buyers should not use unlicensed operators.

Copyright © 2016 Key Media Pty Ltd

English Tudor a Heritage home in Shaughnessey facing demolition.

Monday, April 11th, 2016

Les Twarog was interview by CTV News about this Heritage home at 1550 West 29th Avenue Vancouver. The 1922 English Tudor has been vacant for almost 10 years and the current owner has applied for it to be demolished. The 11,710 square foot lot in for sale for $7.38 million which include plans for a new 6,700 square foot home.

Read more at www.theprovince.com/business/bc2035/unique+shaughnessey+house+facing+demolition+long+rich/11842861/story.html

New Coast realty – Tricks of the trade: Inside a B.C. real estate firm that has home sellers crying foul

Friday, April 8th, 2016

Kathy Tomlinson
Other

It is Wednesday night in Burnaby. Real-estate agents and sales teams are gathered in a well-lit office training room. The group, some of them young and hungry to make their mark in the bracing property trade on the Lower Mainland, is there to learn a thing or two from the boss.

The boss is Ze Yu Wu, owner of one of the fastest-growing new brokerages in the Vancouver area, New Coast Realty, which boasts 445 agents and hundreds of millions in sales. It is an informal training session to give some of his new and top performers an edge. He suggests his sales teams listen up, take notes: These tips will help them, and the firm, make more money.

In this October session, one main theme is straightforward: How to move properties briskly by talking clients into selling their houses for less than they want.

“We should sell the house fast and buy the house fast,” Mr. Wu tells them at one point during the evening, underscoring the lucrative nature of speed in a commission-driven business. They joke and chat with him on how to do that.

Mr. Wu offers this advice: “You must consider your own interests.”

Some of his suggestions in the course of the night, however, tread the razor-edge between shrewd salesmanship and deception. One tip he drops casually is how to persuade clients – by lying to them – that the best offer they will get is the first one.

“It is only a saying to the homeowner, but actually, it’s not true,” Mr. Wu says. “The first offer will never be the best offer, I am sure about this. But you have to say the first offer is the best offer.”

(Listen to raw audio of a New Coast Realty training session.)

As a result of the Globe’s investigation, The Real Estate Council of British Columbia on Friday issued licence conditions for New Coast Realty.

 Mr. Wu is not a licensed real-estate agent or managing broker. So although he runs the company, he is not bound by provincial laws governing individual licensees, unlike the teams he is coaching, who are supposed to act in their clients’ interests or risk disciplinary action.

He is in the club, though, of insiders making millions in Vancouver’s roaring property market. As prices tick ever upward, prompting a national debate over the causes of the phenomenon, the industry is under intense scrutiny after revelations of shady dealing. As a result of a Globe and Mail investigation into the practice of shadow flipping, for instance, B.C. Premier Christy Clark is promising tougher penalties for dodgy operators. An advisory group is trying to come up with deterrents for a list of questionable practices by June.

Mr. Wu, 42, is a permanent resident who moved here from China a decade ago. He does not speak English, and most of his staff speak Mandarin, so he explains his techniques in that language.

The Globe obtained an audio recording of Mr. Wu’s training session, held in Burnaby, B.C., on Oct. 14, 2015. It reveals the company owner teaching agents techniques to persuade clients to sell quickly, for less than their home could be worth.

“You must print out the lowest prices in the neighbourhood to show to the homeowner,” he says during the session. (The Globe translated the recording, and had it reviewed by a second Mandarin speaker who works in the real-estate industry.) “It is very critical to print out low sale prices in the neighbourhood.”

Several agents who have left New Coast told The Globe their former boss’s ideal business model is to sell client properties quickly to investors or speculators who are also New Coast clients, which maximizes the firm’s commissions. The ultimate goal, they say, is to have those investor clients hire them again to flip the properties for higher prices.

New Coast denies that through its lawyer, Simon Coval: “We are instructed that it seeks to obtain the best price for its clients.”

However, Mr. Wu told the agents in the session: “If the homeowner still insists on a high price and the deal cannot be closed, we agents have to keep travelling around and wasting time. We would keep burning the gas and no one will reimburse you for that. Our company will not reimburse you.”

Mr. Wu declined several requests from The Globe for an interview. Mr. Coval said his client’s words are being taken out of context.

“New Coast points out that the discussion included, for example, Mr. Wu stating … that the most important thing to remember is for agents to be sure not to do anything illegal or non-compliant and that respecting the requirements of their professional license is more important than money,” Mr. Coval said in a statement.

In the training session, Mr. Wu does warn agents to be mindful of their obligations. After about 40 minutes of coaching, he says: “Be careful. First of all, protect your licence, before you do anything else.” And again: “Be sure not to break the rules. Under this principle, you can take other actions.”

He goes on: “No matter how much money the deal is worth, even if the deal is right in front of you, don’t look at it. It will affect the licence.”

Some real-estate agents who have attended Mr. Wu’s sessions say the tactics make them uncomfortable, despite the warnings.

“Sometimes the owner wanted us to do something illegal to make more money,” agent John Zhou told The Globe. (He now works for a competitor and claims New Coast owes him $45,000 in commissions.)

“Of course, people trust the classes they are getting at the brokerage,” said Chris Chen, another licensee who left for the same competitor. “What I can remember, a lot of it sounded unethical.”

Real-estate licensees know, under B.C.’s Real Estate Services Act, it is their fiduciary duty to put clients’ interests first. It is illegal for them to deceive or hold back information.

New Coast has an unusually large stake in what agents earn. Unlike other brokerage firms, it takes a 50 per cent cut of team members’ commissions. Several people in the industry say most firms take much less, instead charging the agents fees for services.

During the session, Mr. Wu tells agents their goal is to persuade sellers to reduce their expectations and their prices. “In brief, whatever you are saying, the homeowner should think: Yes, it makes sense. The homeowners feel every word I am telling them makes sense. Then you can suppress homeowner’s bottom price.”

Several people who have worked for Mr. Wu say he often encourages agents to “double-end” their deals. That practice, in which the same agent or brokerage team represents both seller and buyer, is legal in B.C. However, because of potential conflicts, some firms do not allow it, according to disciplinary records from the Real Estate Council of B.C.

One competitor recalled a double-ended deal in which he believes he saw those conflicts play out.

In January, the agent told The Globe, he contacted New Coast agent Tracy Niu about a property she had listed that day on behalf of a seller. He was too late; the house had sold. One of Ms. Niu’s other clients – a buyer – had already snapped it up. Two days later, the agent said, Ms. Niu called him back and offered to flip the property to his client for $135,000 more than what her own client sold for.

Deals like this are done at the seller’s expense, said the agent, who spoke on condition of anonymity because he could face discipline by the Real Estate Board for publicly questioning a fellow member. “The agent told us it was none of the seller’s business. … How greedy can you get?”

MLS records confirm that Ms. Niu represented both seller and buyer in the sale. New Coast, through its lawyer, denied that Ms. Niu offered the property to the agent at a higher price.

New Coast agents represented both buyer and seller in one out of five transactions in the past two years, according to internal figures from the Real Estate Board. Other brokerages’ ratios are significantly lower. For example, two other new firms double-end deals 5 and 6 per cent of the time.

In some New Coast deals, the listing agent persuaded the seller to pay a bonus – $10,000 to $50,000 extra – to the buyer’s agent. New Coast and the agent team each take half of the commission and the bonus.

In the months of June and November of last year, according to sales figures, 13 of 21 double-ended New Coast deals closed for less than the seller initially wanted. Six of those clients who sold for less than list also paid bonuses.

Several real-estate agents told The Globe that Vancouver-area sellers usually get more than asking these days, not less. And in a hot market, they said, there is rarely a need to pay agents a bonus.

“They get the seller to list for a low price and agree to pay a bonus. Then they mislead buyers’ agents on how many offers there are. Then they sell to a New Coast client anyway,” said one competing agent who has been involved in several deals with New Coast.

Because New Coast agents prefer to deal with agents in their firm, outside agents feel shut out.

“This actually drives up prices, because outside [agents] have to offer way over market price just to get in on these deals.”

In the training session, Mr. Wu suggests another trick to make even more money on a deal: persuade the client to pay a bonus to the buying agent, then take a cut for yourself.

After adding the bonus, Mr. Wu tells the room, apologize to the other agent: “Sorry, you can have half and I’ll have the other half.”

He sounds a note of caution to his teams, however.

“At this time, if you are dealing with other companies, be careful with issues that could violate the rules. If the other agent is from our team, it can be easily arranged, right? Bonus is so awesome.”

New Coast’s lawyer, Mr. Coval, said the “context of this remark is a response to a question about attracting a buyer to a client’s property by offering higher commissions.”

The Globe spoke with one recent New Coast client who is convinced his agent was “working both sides” and cost him more than a quarter of a million dollars. “It makes me feel cheated,” Sukhjit Bassi said. “They rushed me into this deal – and that cost me money.”

According to Mr. Bassi, New Coast agent Sandra Li persuaded him two days before Christmas to list his Richmond house for $1.27-million – a low price – a tactic used to generate interest, with the aim of drawing multiple offers and fetching a higher price.

The next day – before showing his home to any prospective buyers – she sent an offer from a numbered company for $1.4-million. He countered for $1.5-million. They made a deal.

“Although the [upcoming] open house was cancelled, a whole bunch of people still showed up,” Mr. Bassi said. He said he received an angry voice mail from a buyer who was willing to pay more.

Records from other sales show the director of the numbered company is a speculator and former agent who has done other deals through Ms. Li. He had no agent representing him. Mr. Bassi said the buyer came to view the house later, along with Ms. Li’s assistant and an unrelated couple.

“I found it strange,” Mr. Bassi recalled: “‘Okay, I see the buyer. But who are these people?’”

Mr. Bassi said Ms. Li then sent him a text message asking detailed questions about his house, which he found odd because it was already sold. Mr. Bassi later discovered the buyer had assigned the contract to the unidentified couple for $100,000 more. None of that money went to Mr. Bassi. (Contract assignment, also known as shadow flipping, is when a buyer sells a property quickly to another buyer before the deal with the initial seller closes.)

He believes his own agent, Ms. Li, arranged the flip, although another former New Coast agent’s name is on the paperwork. The kicker, he told The Globe, was when his neighbour sold his “identical” house for $300,000 more than Mr. Bassi received.

“This is when I realized I had been duped. … I didn’t get market value for my house,” he said.

Through their lawyer, New Coast and Ms. Li said they had no idea their client’s house was flipped until The Globe brought it up. (Mr. Bassi raised the matter with Ms. Li in February, according to e-mails viewed by The Globe and Mail.) Mr. Bassi also recorded a conversation in which Ms. Li’s assistant tells him “everyone knows” about the flip.

Real Estate Board figures show New Coast bought and sold more than a billion dollars in property last year – and that does not include private and pre-sale deals outside the Multiple Listings Service.

A 2014 article in New Coast’s bilingual publication talks about selling to Chinese citizens who want a “safe house for their wealth.”

“The already lively real estate market in Vancouver is further taking giant leaps forward as a result of the Chinese anti-corruption policies,” the article says.

“Experts predict that with the increasing strictness of the anti-corruption policies in China it will continue to cause cash flow into the Vancouver housing market. Tapping into the patterns of these trends will help both buyers and sellers make the right and easy choice.”

Mr. Wu and his wife, Hui Ping Huang, are the sole directors of the corporation that founded New Coast in 2012. Bill Messer, the managing broker who helped them set up the firm, says it had “multi-millionaire” backers from China. Mr. Messer says he quit after a year over what he considered to be unethical practices.

“There is hundreds of millions of dollars into this scam,” Mr. Messer said. “The managing broker is responsible for everything that goes on in that company, if [an agent] does anything wrong. That is why I got out.”

Managing brokers are accountable for their brokerage firms’ activities and can lose their licences over infractions.

In an interview, the Real Estate Council of B.C. said there could be penalties for a brokerage found to have engaged in deceptive dealing or in breach of fiduciary duties.

“It is completely unacceptable to act contrary to a seller’s interest. It is a fundamental breach of our legislation to be deceptive in any way in dealing with our clients,” said Maureen Coleman, professional standards adviser.

Ms. Coleman said New Coast managing broker Josh Rosenberg – who was at Mr. Wu’s session in October, according to New Coast’s lawyer, but speaks only some Mandarin – should have intervened if Mr. Wu crossed any ethical lines.

“We would expect that he would … not permit his licensees to participate in any sort of instruction that would bring them into non-compliance,” she said.

The council, she said, will investigate.

Given that Mr. Wu does not have a real-estate licence, the council cannot take any action against him, unless there are financial discrepancies or other infractions unrelated to training. (The Globe and Mail found no evidence of such infractions.)

In a statement on Friday, Mr. Coval said New Coast met with the council on Thursday and was fully co-operative. The lawyer reiterated the company’s position that Mr. Wu’s remarks were being taken out of context.

The Globe talked to several people who say they have raised concerns about Mr. Wu’s company with the council before, but felt ignored. Another former New Coast managing broker, who requested anonymity, said he advised the regulator when he quit the company in 2015.

“My reasons for my resignation from New Coast Realty are numerous,” he wrote in an e-mail to the council. “They continue to be non-compliant with both the Real Estate Council and the Real Estate Board.”

No one got back to him, he said.

He was annoyed, but not surprised: “They are supposed to protect the public, and they don’t.”

The former managing broker said a lack of consequences sends the wrong message to those who don’t play by the rules. He alleges he had warned Mr. Wu in the past that New Coast was running afoul of the council and the board, to no avail.

When you can get away with it, he said, “It’s sort of like, ‘I have the licence to do whatever I want.’”

A managing broker from a competing firm shared e-mails he sent to the council and the board, dating back three years, also raising red flags about New Coast. He said he called Ms. Coleman, urging her to investigate, but gave up in frustration.

Mr. Messer said he also raised his concerns to the council when he quit in 2013.

“The Real Estate Council encouraged me to get out of [the company],” he said.

New Coast challenged these accounts. In a statement, Mr. Coval said: “We are instructed that it does not have Managing Brokers who have departed in such circumstances.”

Wendy Yang is a top-tier real-estate agent who just left New Coast to work for the competition in February. She alleges the brokerage owes her $200,000 in unpaid commissions. In court filings, the company alleges she engaged in fraudulent conduct by altering her listings so she could take them with her when she left. The matter has not been settled.

In an interview, Ms. Yang said Mr. Wu told her he is helping an investor from China buy $50-million worth of Vancouver-area homes quickly – with the intent of flipping them for a profit, using his company’s agents.

“[The investor] would make $200,000 to $300,000 for the flip on every property,” Ms. Yang said. “They are buying a lot of houses. One night on Mr. Wu’s table, I saw more than 10 property information sheets there.”

Ms. Yang said Mr. Wu has his sights set on the condo market next: “That is the real gold.”

Mr. Wu’s lawyer insisted he “is not working on any such thing.”

Don Stutt suspects a shadowy deal is playing out with the Richmond home he and his wife just sold. He said that, in December, the couple was given “a song and dance” by New Coast real-estate agent Claire Li, who persuaded them to sell – just hours after their house was listed – to her client.

The Stutts made a quick deal through their own agent for almost $1.5-million, and are happy with the price.

They said they were told the buyer planned to move into the house, but was flying back to Asia the next day. “That’s why the bid was only good until midnight,” Mr. Stutt said.

The buyer, he was told, had lost out on other properties. “He didn’t want to be in a bidding war and lose.”

As the Stutts were packing up their belongings, the buyer’s agent e-mailed asking if New Coast could host an open house because she wanted to find a new buyer to assign the sales contract to. The Stutts, who were still living in the house, refused.

“You want to have an open house? You bought the house [quickly] because you didn’t want an open house.” Mr. Stutt recalled. “There’s no remuneration for me – and it stunk.”

The buyer, it turned out, was actually a director of New Coast Holdings Ltd: Ms. Huang, whose home is in Richmond, B.C., not Asia. In the end, before closing, Ms. Huang assigned the contract and added another buyer’s name to hers.

Just four days after that deal closed, she and her co-owner listed the house again. The Stutts’ former home is now for sale, by New Coast, for nearly $400,000 more than what they sold it for just four months ago.

“Truth is always stranger than fiction,” Mr. Stutt said. “I suspected I was being sold a bill of goods from Day One.”

Through its lawyer, New Coast said Ms. Huang had second thoughts about the purchase. “Instead of backing out she completed the purchase with a friend.” The statement did not address Mr. Stutt’s claim that he was deceived.

Back at Mr. Wu’s fall training session, he offers agents suggestions on how to persuade homeowners their house is worth less than they think it is.

For a home in Richmond, for instance, he suggests agents warn sellers that wealthy buyers are afraid of earthquakes and tsunamis. “This reason is very powerful,” he says.

(On its website, the City of Richmond advises that the risk of tsunamis is not significant, despite myths to the contrary.)

Mr. Wu also offers a tip for selling in Vancouver’s west side: “Say that the houses in this area are too expensive, so you can suppress the seller’s bottom price. …

“If it’s a house by the road, say don’t buy a house by the road next time; if there is a ditch in front of the house, say don’t buy a house behind a ditch or electricity pole next time; if the house is quite narrow, say don’t buy a narrow house next time, it doesn’t look grand.”

He also suggests clients be led to believe that Chinese buyers’ sources of money are drying up, for various reasons – all of them plausible and intended to instill a sense of urgency to the transaction.

The Chinese stock market is down: “How do people have the money to buy the house?”

China is tightening its controls on outflows of cash: “People want to buy the house, but they can’t transfer the money to Canada.”

Later in the session, Mr. Wu reminds his staff that a deal benefits both agent and seller, describing a successful transaction as a virtuous circle.

“If you sell the house, you are doing him a favour. This offer is a good offer. Once the house is sold, there is tax. Then you are making contribution to the society. You are helping the client with an investment. And you are making contribution to society. We need to raise our own family, we also need to take the responsibility of society.”

Copyright 2016 The Globe and Mail Inc.

CMHC releases report on foreign ownership

Thursday, April 7th, 2016

Justin da Rosa
Other

“The really interesting thing about this report is the insight it provides into foreign ownership of condominiums in Canada by age of structure. For example, in the downtown core of Toronto, we know that, in buildings completed since 2010, about 10 per cent of those units are owned by foreign buyers,” Bob Dugan, chief economist, Canada Mortgage and Housing Corporation, said. “This compares to about 2.3 percent for units completed during the 1990s. This represented another piece in the puzzle of foreign investment in Canada. It remains a top priority for CMHC to continue to get more information on foreign investment in Canada’s Housing market.”

The report found that foreign ownership is most prevalent in new condo buildings in Toronto and Vancouver.

In Toronto about 10% of newer buildings (built after 2010), compared to 2% of those buildings built in the 1990s.

A similar trend was found in Vancouver, where 6% of units in newer buildings are believed to be foreign-owned.

Highlights from the report include;

  • In the Toronto CMA, the share of foreign ownership is less than 2% for buildings completed before 1990 and 7% for newer constructions completed since 2010. This effect is even more pronounced in Toronto Centre where about 10% of the newer stock is owned by foreigners.
  • In the Vancouver CMA, foreign buyers’ share rises from less than 2% for properties built before 1990 to about 6% for those completed since 2010.

The stats were pulled from a fall 2015 survey.

CMHC admits the data isn’t perfect.

“At this time, no existing tool can provide a definitive measure of the level of foreign investment in Canada’s housing markets,” it said in a release. “That said, CMHC regularly engages in discussions internally, as well as with industry experts, as part of its continued efforts to develop a program of work that would better capture data on foreign buyers.”

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