A deep dive into underground banking

Gordon Hoekstra
The Vancouver Sun

Lower Mainland property developer Bene Group has a company registered with the federal government that allows it to engage in foreign exchange dealing and money transferring.

Called the Bene Financial Group Ltd., its office is listed as located in a strip mall on No. 3 Road in Richmond. The sole director of Bene Financial is Ming Nan Li, the head of the Bene Group, according to B.C.’s corporate registry.

But the information is not correct.

Ming Nan Li was never the owner of the Bene Financial Group. Instead, another man ran the business under that corporate name and used the address in the strip mall as a convenience, according to a Bene Group company official.

 “It’s not owned by us actually. … Actually (the other man) was just using our offices,” said Peter Zhang, who identified himself as an assistant at the Bene Group when he answered a number listed with the Financial Transactions and Reports Analysis Centre (Fintrac). A money services business (MSB) is required to register with Fintrac, Canada’s financial intelligence gathering agency. 

A Postmedia investigation — involving hundreds of pages of court records, corporate registry filings and property records — shows that two dozen MSBs in Richmond, Vancouver and the North Shore are listed with Fintrac as being located in houses or condos. Other MSBs are located at the offices of lawyers, accountants and realty companies. 

Many of these have no public face — at the street level or online or through advertising — which would make it difficult for any prospective clients to find them.

Across Canada, more than 800 MSBs handle an estimated $39 billion a year in transactions. The federal government and international anti-money-laundering standards agency Financial Action Task Force (FATF) have identified the sector — which includes foreign exchange dealing, international money transfers and cashing or selling money orders and traveller’s cheques — as highly vulnerable to money laundering.

Zhang said he hadn’t seen for some time the man who actually operated the Bene Financial Group, who he named as Wang Bing Xu, and had no contact information for him.

B.C. Corporate Registry records show the Bene Financial Group was dissolved as a company on June 28, 2016, by the province for failure to file annual reports. That was nearly two years before the company was registered as an MSB with Fintrac. Its registration runs out on Jan. 31, 2021.

Bene Financial has potentially run afoul of several federal rules, including one that an MSB must submit a cancellation of a registration within 30 days if it ceases operations and must notify Fintrac of location and other changes. (Violations of these rules are considered serious and can result in fines up to $100,000 under federal laws.)

This finding by Postmedia is among several that raise questions about the scrutiny of MSBs in B.C. as increasing attention is being put on money laundering in the province and how it is being policed.

In its 2016 examination report of Canada, the FATF said: “MSBs are vulnerable to money laundering as they are widely accessible and exposed to clients in vulnerable businesses or occupations, and clients conducting activities in locations of concern.”

B.C.’s examples of MSBs that have been involved in money laundering include a $200-million laundering operation in the early 2000s that was run by Tho Ahn Khuc, who operated a currency exchange out of his Burnaby home. In 2014, a currency exchange in downtown Vancouver was at the centre of a criminal case where $24 million in drug money was allegedly laundered.

‘It just doesn’t pass the smell test’

Postmedia’s findings show that a man arrested in the 2015 raid of the illegal MSB Silver International, which is alleged to have laundered as much as $220 million a year, is a director of a currency exchange in Richmond.

In addition, a West Vancouver man who was listed as the sole director of an MSB operated out of a house became embroiled in a civil suit that alleges he arranged the illegal transfer of millions of dollars between China and Canada.

These examples raise questions that underline the need for greater scrutiny of MSBs, say experts, including why these operations are being run out of homes and why property developers or realty companies are running MSBs.

“The operation of those MSBs merit, in my view, an examination by Fintrac,” said Denis Meunier, a former deputy director of Fintrac and former director general responsible for criminal investigations at the Canada Revenue Agency.

Meunier, who now acts as a senior advisor for Transparency International in Canada, a non-profit group that advocates for better corporate transparency, said the Postmedia findings also point to the importance of having transparency on beneficial ownership of corporations.

 “It just doesn’t pass the smell test,” added Garry Clement, a former RCMP superintendent who served as national director of the proceeds of crime program and is now an anti-money laundering consultant.

In response to Postmedia questions on MSBs in B.C., Fintrac said it could not comment because federal law prohibits the agency from disclosing information it has received or information it may have disclosed to police or other law enforcement agencies.

“In addition, Fintrac cannot speak to specific cases and is prohibited from commenting on compliance enforcement actions that may have been undertaken in relation to a specific reporting entity or within a reporting sector,” Fintrac spokesman Dino Roberge said in a written statement.

MSB owner linked to alleged underground banking

Postmedia’s findings include a court case that pointed to a money-transfer scheme between China and Canada that appeared to take place outside of normal transfer channels that an MSB would use, where money would be transferred directly through banks from one country to another.

In a B.C. Supreme Court civil suit, Vancouver resident Haibin Liang alleges that Zhuo (Tony) Huang, who headed up the MSB Ronet Current Financial Group Inc. between 2015 and 2018, entered into an agreement where Liang would deposit Chinese currency into bank accounts in China owned by individuals directed by Huang. In turn, Huang would deposit the same value of currency — minus a service fee — in a Canadian bank account designated by Liang.

These kinds of transactions, labelled underground banking by police and regulators around the world, are often used to get money out of China, which has a $50,000 annual restriction on the amount individuals can move out of the country. Transactions like these would violate Chinese laws and potentially Canadian regulations, which require reporting of cash transactions over $10,000.

According to court documents, about $3 million in Chinese currency was deposited between October and December 2016 by Liang into the accounts of eight different people at Chinese banks that included the China Merchants Bank, Shenzhen Kejiyuan branch, and the Agricultural Bank of China, Jinhu branch.

The first $2 million in matching deposits were made in Canada by Huang but only a portion of the remaining $1 million was deposited, according to the court filings.

Huang denied the allegations, filing a response that said he did not enter into a contract with Liang and has not received from or paid any money to Liang.

Huang’s response added that if the court did find there was an agreement, that because Liang’s intention was to use the exchange to circumvent the laws of China and Canada, Liang has only himself to blame and the court should not hear the suit. The last filing in the case was in September 2018.

Huang, who ran the Ronet Current Financial Group out of a $5.9-million West Vancouver home owned by his mother, could not be reached for comment.

Several calls to the number listed for Ronet Current Financial with Fintrac — the same number listed for Huang online as a realtor for LeHomes — went unanswered. Huang also could not be reached through LeHomes.

In a written response to Postmedia’s questions about the case, Fintrac spokesman Roberge said depending on the amounts of transactions in Canada, MSBs may have obligations under anti-money-laundering laws such as client identification, record keeping and reporting but that Fintrac could not comment on any specifics relating to Ronet Current Financial.

Another Postmedia finding revealed that a director of a Richmond MSB had been arrested as part of the RCMP’s E-Pirate investigation into the underground bank Silver International, considered B.C.’s biggest ever money laundering case.

In 2015, during a raid at Silver International in Richmond, Guo (Claude) Liang Wang was arrested coming into the business with an empty suitcase. According to court records, RCMP surveillance had observed him leaving the same location earlier with a suitcase and believed he was a courier. Wang was not charged.

According to B.C. Corporate Registry records, Wang is one of the directors of HKTK Investment Ltd., registered as a foreign exchange dealer with Fintrac.

Contacted by phone, Wang said he has never been questioned by Fintrac or by police about HKTK in relation to his arrest at Silver International.

Wang said he could not remember why he went to Silver International. “I think somebody tell me to go there,” said Wang. “I don’t have nothing on me, right. I don’t have anything. I just go there and I just got arrested. That’s everything.”

He had no explanation for why he was bringing in a suitcase.

Wang said that HKTK, located in a mall on No. 3 Road in Richmond and called HKTK Express Exchange, deals only in currency exchange and not international transfers. “We just do small amounts,” he said.

A visit to the currency exchange in the mall during business hours in mid-March found the office shuttered and locked up.

The RCMP did not respond to a request for comment and Fintrac said it was prohibited from commenting on specific cases.

No advertising or online presence

Another of the two dozen MSBs located in houses and condos is Anxin Real Estate, registered with Fintrac as a money transfer and foreign exchange dealing business located at a house in Kerrisdale. Information on the real estate firm’s website appears to be stale, dating from 2016.

Contacted at the phone number listed with Fintrac, a man said the MSB business ceased operating last year and had been connected to the real estate business. An MSB that has ceased operating is required to submit notification to Fintrac, but Anxin’s registration remains active on Fintrac’s registry, with an expiry date of March 31, 2020.

Asked how the MSB and the real estate firm were connected, the man, who would not identify himself, said he was not “really qualified to answer that” and was “not authorized to speak to any reporter.”

Calvin Bui and Partners Inc., registered as a money transferring business with Fintrac, is also listed as being located at a house in Vancouver. Bui, who also has a business listed online as a bookkeeper/accountant, said the MSB is no longer active. However, it is listed as active on Fintrac’s registry, with an expiry date of Sept. 30, 2020.

Bui told Postmedia that in the past he had helped some friends and family, but declined to say any more.

Dragon Wealth Holdings, a money exchange dealing business that has no apparent advertising or online presence, has locations listed on the 25^th floor of a Coal Harbour condo and at a home in Kerrisdale.

A man who answered one of the numbers listed with Fintrac for the business said it was the wrong number for Dragon Wealth and declined to say more.

Messages left for Crystal Xu, who is the sole director of Dragon Wealth according to corporate registry records and who has been involved in redeveloping houses on the west side, at the other Fintrac-listed phone number went unanswered.

German Report recommended licensing regime for MSBs

MSBs were identified as a concern in an independent report into money laundering commissioned by the B.C. government last year.

Peter German, the report’s author and a former RCMP deputy commissioner, recommended last summer the province consider a licensing regime for MSBs that is similar to the Metal Dealers and Recyclers Act. That act requires metal dealers to report suspected stolen items, and gives the province powers to inspect and issue fines up to $50,000 for companies and $5,000 for individuals.

Licensing of MSBs is common at the state level in the United States but Quebec is the only province to adopt it in Canada.

So far, it is unknown what would be required in B.C. to become licensed.

The B.C. Attorney General’s office said work has commenced on about half of German’s 48 recommendations, released in June 2018, but would not say what is the status of the MSB recommendation.

Meunier, the former deputy director of Fintrac, said he would like to see all provinces consider adopting a licensing regime similar to Quebec’s.

Unlike the Metal Dealers and Recyclers Act that German recommends B.C. consider for licensing MSBs, the Quebec act gives the province wider-ranging powers, including the authority to vet those who want to set up MSBs.

The application process involves applicants providing Quebec’s securities regulator with a significant amount of information on the proposed MSB, including its legal structure, officers, directors, partners and branch managers. The MSB and its owners must also meet conditions of suitability and obtain a security clearance from the Quebec police force, the Sûreté du Québec.

© 2019 Postmedia Network Inc.

Upscale homes in Intergulf?s Hunter at Lynn Creek will take their place in a vibrant, mixed-use community

ROBIN BRUNET
The Vancouver Sun

The success of any new residential development is heavily dependent on location, and in the case of Hunter at Lynn Creek, the location is unique. Imagine a brand new village of gleaming residential towers rising directly above unspoiled streams and woodland, and you have one reason why so many prospective buyers are focusing on this North Vancouver project.

Also, a strong case could be made that the desirability of the Hunter at Lynn Creek homes is due to a family-run developer that has a personal commitment to the neighbourhood. “Our founders all live on the North Shore and have created iconic landmarks such as Lonsdale Quay, as well as homes in Whistler Blackcomb. And when we first learned that the District of North Vancouver proposed to create a new community called Lynn Creek, we were inspired to help make it happen,” says Shaadi Faris, vice-president of Intergulf.

Jack Bernard, senior sales director for Rennie, adds: “With Hunter at Lynn Creek, the people at Intergulf have checked every conceivable box that makes a new condo development attractive. And as a result, while most new developments experience initial strong sales of their one-bedroom units, we are seeing strong pre-sales of our one-, two-, and three-bedroom homes, which is quite remarkable.”

Hunter at Lynn Creek consists of two beautiful towers designed by Ramsay Worden Architects, one oriented to the east and the other to the west, anchored by a podium of townhouses. The degree of quality is evident as soon as visitors enter the five-star, hotel-style, double-height lobby, with a magnificent water feature, linear built-in fireplace and green living wall.

The quality continues into the homes themselves. “So many new developments have tight floor plans, but Intergulf wanted living spaces with generous square footage and high ceilings, made for family living,” says Bernard.

To augment an almost endless series of amenities in the greater neighbourhood, Intergulf is building a 27,000-square-foot community centre right next to the towers; a steam and sauna spa plus fitness centre will be just an elevator ride away. Also, residents will have direct access to 12,000 square feet of amenity space consisting of an indoor/outdoor lounge and a private dining room with gourmet kitchen. Additionally, children will be able to enjoy 8,400 square feet of green space and play area.

Area3 Design Studio is responsible for each home’s elevated living spaces, offered in two carefully curated colour palettes mirroring the picturesque surroundings: Mountain, and Creek. (Both towers were designed to afford great views of Burrard Inlet, downtown Vancouver’s skyline and the North Shore mountains). Wide-plank flooring, European-inspired kitchens, Fisher & Paykel appliances, and much more are what owners can expect of their residences.

As for the immediate location, it is being transformed into a transit-oriented, mixed-use community offering a wide range of housing options for people at all stages of life. “It’s a unique location because it’s so close to employment, retail and great schools and services, while being situated next to Lynn Creek and Seylynn Park, and just minutes away from the mountains,” says Faris.

The District of North Vancouver envisions the Town Centre as a vibrant street where neighbours will come to shop, eat, gather and enjoy the community spaces. “But this isn’t just a vision of the future – it’s happening as we speak, with lots of construction already underway,” says Faris. “We’ve broken ground on our project, with a completion date just three years down the road. Within the space of five years, the district will have come a long way in realizing its goal, and I think this will be one of the most talked-about neighbourhoods on the North Shore.”

Bernard stresses that much of the success to date of Hunter at Lynn Creek is due to Intergulf’s expertise and corporate make-up. “As a family-run company with a 38-year history of building homes, they are focused on providing value, and people are recognizing the value of this particular development,” says Bernard.

Hunter at Lynn Creek also benefits from Intergulf’s practice of doing everything in-house, from presiding over design to the actual construction process. This not only results in an unusual degree of quality control; it also gives prospective buyers unique opportunities, such as a 15-per- cent down payment requirement instead of the standard 25 per cent.

A brand new presentation centre for Hunter at Lynn Creek is available for viewing at 1519 Hunter Street, North Vancouver (open daily from noon to 5 p.m., except Fridays, or by appointment).

© 2019 Postmedia Network Inc.

Hadleigh on the Park exudes a charming Coquitlam ambience

Kathleen Freimond
The Vancouver Sun

Hadleigh on the Park

Project address: 3306 Princeton Avenue

Project city: Coquitlam

Developer: Polygon Hadleigh on the Park Ltd.

Architect: Formwerks Architectural

Interior designer: Polygon Interior Design Ltd.

Project size: 88 homes

Bedrooms: four and five

Unit size: approximately 2,100 to 2,450 square feet

Price: From $988,000

Sales centre: 3306 Princeton Avenue, Coquitlam

Sales centre hours: noon — 5 p.m., Sat — Thurs

Phone: 604-439-8852

Website: polyhomes.com/community/hadleigh

Hadleigh on the Park is a new Polygon development in Coquitlam where Tudor-style architecture featuring steep-sloping gable roofs and wood bracket details give the townhome community a welcoming atmosphere and evokes the charming ambience of the English countryside.

Named for the market town of Hadleigh in Suffolk, the development, designed by Formwerks Architectural, is located on Princeton Avenue (a cul de sac) and opposite Burke Mountain Pioneer Park in Coquitlam’s Burke Mountain neighbourhood.

“It’s a beautiful location in a neighbourhood that is already established; people love being close to the park and the walking trails in the area,” says Goldie Alam, Polygon’s senior vice-president of marketing.

The 88-home development is expected to be most popular with families who want the size and feel of a single-family home, but the convenience of having someone else take care of the yard, Alam says.

There are two show homes open to potential buyers: the Aydon plan and the Carlisle plan. Buyers can choose from two interior design colour schemes, Pearl, which leans toward a traditional style with a few contemporary flourishes, or Onyx, which shows a slight West Coast influence.

In the kitchen, the Pearl scheme features an attention-grabbing antico scuro marble backsplash. The marble – black with delicate touches of grey and beige – is presented in elongated hexagon shape tiles in the full-height backsplash. White painted Shaker-style cabinetry provides an interesting contrast and a grey quartz countertop completes the palette. Throughout the home, the Pearl scheme has white wall paint with grey trim (as seen in the Aydon show home).

In the Onyx option, the creamy white and grey marble in the backsplash is complemented by flat-slab cabinetry, white quartz countertops and grey wall paint with white trim (as seen in the Carlisle show home.)

North Vancouver couple Raein Jamshidi and Nousheen Bastani recently purchased a four-bedroom, four-and-a-half bathroom home in the development. Jamshidi says they were looking for a forever home.

“We don’t want to move multiple times, so we wanted a home to grow into and as soon as we walked into the [show] home, we loved it,” he says.

After an initial viewing on a Saturday, the couple returned the next day to select a floor plan and colour scheme and bought a home in the first phase of the development.

The couple’s 2,120-square-foot Aydon-plan home with the Pearl scheme features a bedroom and bathroom downstairs – a potential in-law suite – and a formal dining room, living room, large kitchen and family room on the ground level and three bedrooms upstairs.

“The gas cooktop and the gas outlet on the deck for a barbecue are some of my favourite features,” says Jamshidi, who adds the integrated appliances in the kitchen were also on the couple’s wish list.

The Aydon plan is one of three available in the first phase of the development: the others, also named for English towns, are the just-under 2,300-square-foot four-bedroom-and-rec-room Bedford plan; and Carlisle, the 2,346 square foot plan with four bedrooms, four-and-half bathrooms and a rec room.

Alam’s favourite room in the homes is the kitchen.

“They are bright and most have a door to the deck to enhance the indoor/outdoor feel,” she says. “The kitchens are very usable and designed for people to spend time there – families cooking, while kids are doing their homework at the island.”

The appliance package includes an integrated 36-inch Fisher & Paykel refrigerator with french doors and a pullout freezer drawer, a dishwasher (also integrated), a five-burner KitchenAid gas cooktop and a stainless-steel electric wall oven and microwave.

Other features include the undermount double stainless-steel sink with single-lever Grohe faucet and pullout spray, rollout recycling bins, soft-close hardware for all cabinet doors and drawers, plus a pull-out pantry and Lazy Susan in the corner cupboard. The large island (approximately three by seven feet in the Aydon show home) has a waterfall edge and a generous overhang to easily accommodate four comfortable kitchen stools.

The master ensuite bathrooms have a spa-like ambience, says Celia Dawson, senior vice-president interior design for Polygon Interior Design.

“The design is clean and fresh and creates a calm space where you just want to soak in a tub of bubbles – it’s very conducive to that relaxing feeling,” she says.

To achieve that esthetic, Dawson specified quartz countertops and porcelain marble-look floor and wall tiles and a sleek medicine cabinet.

“The vanities with double sinks appear to be floating, giving the rooms a spacious feel, while the soaker tub and shower with frameless glass door, built-in bench seat and the rain shower head and wand all contribute to that spa feel,” she says.

In keeping with the selected scheme, the bathrooms feature the same flat-panel or Shaker-style cabinetry as the kitchens, enhancing a feeling of design continuity throughout the homes. In addition to the master ensuites, there are secondary ensuites with a shower and some third ensuites feature a bathtub.

While engineered wood floors run throughout the main floor living areas, carpets are soft underfoot in the bedrooms.

And there’s a surprise feature in the master bedroom walk-in closet: a built-in wall safe.

“It’s one those things you wouldn’t often think of including, but when you have it, it’s really useful,” Dawson says.

The homes also include laundry rooms with side-by-side front-loading washers and dryers, a countertop for sorting and folding washing and upper cabinets for storage.

© 2019 Postmedia Network Inc.

Canadian home sales fall in February, average price down

ALEKSANDRA SAGAN
The Vancouver Sun

The average price for homes sold last month was down 5.2 per cent from last year as the number of sales dropped to a 10-year low for the seasonally weak month of February, the Canadian Real Estate Association reported Friday.

The national association highlighted the impact of a mortgage stress test that affects federally regulated lenders, including the big banks, but some analysts said February’s drop may be due in part to severe winter weather.

“February home sales declined across a broad swath of large and smaller Canadian cities,” CREA chief economist Gregory Klump said Friday in a statement.

In its updated outlook for the year, the association said it expects home sales in Canada to pull back by 1.6 per cent to 450,400 in 2019, a change that would mark the weakest annual sales since 2010. The association expected British Columbia to account for much of that projected decrease, as well as continued decline in Alberta.

Its forecast projects sales will rise to 459,400 in 2020, up two per cent from the 2019 forecast.

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The national average price is expected to stabilize in 2019 at around $487,000. In B.C., Alberta, Saskatchewan, and Newfoundland and Labrador it forecasts the average home price will retreat, while it will continue to rise in Eastern Ontario, Quebec, New Brunswick, Nova Scotia and P.E.I.

The association expects the national average price to move up 0.8 per cent to $490,800 in 2020.

CREA said February sales by its members fell 4.4 per cent compared with the same month last year. That is the lowest level for the month of February since 2009 and almost 12 per cent below the 10-year average for the month.

On a month-over-month basis, national home sales in February were down 9.1 per cent compared with January for the lowest level since November 2012. It’s the biggest month-over-month drop since the mortgage stress test came into effect in January 2018.

The new stress test requires borrowers to prove that they can service their uninsured mortgage if lending rates go above a certain threshold.

The national average price for homes sold in February was $468,350, down 5.2 per cent from the same month in 2018. Excluding the Greater Vancouver and the Greater Toronto Area, two of the country’s most active and expensive markets, the national average price was just under $371,000.

“Only time will tell whether successive changes to mortgage regulations went too far, since the impact of policy decisions becomes apparent only well after the fact,” said Klump.

“Hopefully policy makers are thinking about how to fine tune regulations to better keep housing affordability within reach while keeping lending risks in check.”

Some analysts however focused on the weather as a key factor.

Doug Porter, chief economist at BMO Financial Group, wrote in a note Friday that February is normally a seasonally slow month even during a tame winter.

“This was most patently not a tame winter month, further bludgeoning a sluggish market,” Porter said.

He added that the year-over-year drop in sales was heavily concentrated in British Columbia and Alberta, while the other eight provinces saw a 2.8 per cent year-over-year rise.

Porter said he won’t delve into great detail on the housing figures as they’re more of a weather report than an economic one at this time of year.

TD Economics senior economist Brian DePratto agreed that severe winter weather in Toronto and Vancouver may have sidelined potential buyers and sellers.

“The true test of market health will come with the warmer spring weather,” DePratto wrote in a note.

© 2019 Postmedia Network Inc.

B-20 impacts BC housing market

Steve Randall
Canadian Real Estate Wealth

The British Columbia housing market continues to struggle with the impact of the B-20 mortgage guidelines.

The stress test that was introduced more than a year ago is still weakening demand with home sales in February down 27% year-over-year to 4,533 according to MLS data from the British Columbia Real Estate Association.

Prospective homebuyers continue to be sidelined by the mortgage stress test,” said Brendon Ogmundson, BCREA Deputy Chief Economist. “As a consequence, and despite a strong BC labour market, sales remained slow in February.”

Prices are weaker too with a 9.3% decline for the average sales price in the province last month to $678,625; and this, together with lower sales meant a total dollar sales volume of $3.08 billion, down 33% year-over-year.

Remaining hopeful
Despite the figures, Ogmundson remains optimistic that things will improve in the coming months.

Falling mortgage rates should provide some relief for homebuyers, providing a small boost to affordability heading into the spring,” he said.

Potential homebuyers will have more choice as active listings increased 36.5% to 30,891 units compared to February 2018. The ratio of sales to active residential listings declined from 27.4% to 14.7% over the same period.

Copyright © 2019 Key Media Pty Ltd

Canadian home prices declined in February

Steve Randall
Canadian Real Estate Wealth

Canadian home prices declined in February, with a key measure posting the largest drop for the month outside of a recession.

The only time there was a larger pullback in the Teranet-National Bank National Composite House Price Index’s 19-year history was during the recession, in February 2009.

It declined 0.4% in February to a reading of 223.00, 1.87% below February 2018 and 1.43% below its September 2018 peak.

There was decline for 9 of the 11 metro areas in the composite index, which ranks home prices by percentage movement relative to a base value of 100 set in June 2005.

Victoria (−2.0%), Hamilton (−1.4%), Quebec City (−1.2%), Calgary (−0.8%), Vancouver (−0.7%), Ottawa-Gatineau (−0.7%), Winnipeg (−0.4%), Toronto (−0.2%) and Edmonton (−0.1%) all declined.

Bucking the trend were Montreal (0.4%) and Halifax (0.3%) with increases month-over-month.

And among the 14 other metropolitan areas for which there is an HPI, only London and Windsor posted monthly gains.

Retreat not collapse While interest rates and mortgage stress tests are taking their toll on home prices, the decline in the index does not mean a collapse in prices.

In Toronto for example, apartment prices have been up for 16 consecutive months, while prices of other types of dwellings declined only 1.2% over the last 6 months.

And in Vancouver, where employment was up 3.1% on a y/y basis in February, seasonally adjusted home sales stabilized in the beginning of the year, limiting the potential of further home price declines.

Copyright © 2019 Key Media Pty Ltd

It is all about over-the-top symmetry and graphic marbles

other

Designer Ryan Korban has always been devoted to Instagram. An influencer himself (with some 137,000 followers), the 34-year-old New School graduate earned his success by designing flagship stores for high-fashion brands that were flooded with selfie-takers from the go. Using bold colors and “wow moments” such as a massive dome made of gold leaf for the Madison Avenue Aquazzura boutique, he lured lookie-loos and the design-curious off the street just to take photos to post to their feeds. “No one wants to design a store that people just walk past,” he says.

So when Broad Street Development asked him to imagine the interiors for 40 Bleecker in Manhattan’s NoHo neighborhood, Korban’s mind immediately turned to how his designs would look on social media. He started with a lobby whose lighting makes anyone look 10 years younger, then furnished it with two marble sofas and lush suede walls.

“It is all about over-the-top symmetry and graphic marbles—all of it meant to fit into a vertical frame that looks great on a cellphone,” he says.

Sales agents stationed in the lobby welcome visitors who just want to pose on those stone slabs. Never mind that the selfie-stick set may not be looking to purchase a condo in the 12-story building, whose one- to five-bedroom homes start at around $2 million, or whether they’re financially eligible.

“We are building a brand, and it deserves to get as many eyes on it as possible,” says Korban of his photo-friendly designs.

While Instagram remains the fastest-growing social media platform on the planet, with more than 100 million active users in the U.S. alone, real estate developers have been slow to embrace social media from the design phase of building. Many worry that photo-ready rooms that allow entrée to just anyone might cheapen their expensive product, while others simply don’t want wide-eyed out-of-towners hunting for real estate porn.

But savvy developers and architects are embracing the power of the platform to move product, and are baking creative moments into the design process—sometimes from the moment of construction. With the right Instagram-worthy photo op available to all, the thinking goes, a post just might influence a close.

Up at Aby Rosen’s 100 East 53rd Street, art is the focus of the Foster + Partners-designed building, where plenty of visitors and brokers pop by to take photos with the Rachel Feinstein work in the lobby and the blue-chip pieces from the developer’s private collection in the building’s model loft residence. Compass’s Leonard Steinberg is fine with prospective buyers posting images of themselves with the building’s hashtag (#100e53), and has seen some traction through random influencers.

“We have gotten some direct inquiries from social media posts—sometimes from agents, sometimes from buyers who ask their agent to see it,” Steinberg says of the Midtown residence, where studios start at $2.1 million.

Meanwhile, Brooklyn’s record-busting Quay Tower (the penthouse is in contract for more than $20 million, which stands to become the highest-priced sale ever in the New York borough) installed an Instagram pop-up station in its sales office. Wannabe selfie-takers step into a cartoon version of Brooklyn Bridge Park, and the developer has thoughtfully placed props for playful photo ops. (The photo is emailed to participants, in the process collecting contact information for future sales.)

Lower down the price-point totem pole, David Barry, president and chief executive officer of development firm Urby, knows his prospective tenants want enviable experiences to post on their Instagram feeds. So he thinks up photo-friendly spaces before construction begins. His Harrison Urby building in Harrison, N.J., where rentals start at around $2,000 for a studio, has a 30-foot-tall treehouse with a wall of braided rope in the common-area café. Anyone can come by for a latte and a snap.

“The combination of greenery, oak millwork, decorative lighting, and a multicolored, tiled floor creates the feeling of a tropical oasis in what is a historically industrial town,” says Barry, and when it’s flooded with selfie-takers, it gives the common space a lively energy.

His Staten Island Urby was conceived with the only commercial farm to be incorporated into a residential development in that borough; it grows more than 50 varieties of plants and vegetables, tended by a real farmer. (Is anything more Instagrammable than an urban farmer?)

Barry loves that his spaces have earned their own social media presence—@urbylife has nearly 16,000 followers—and he believes Instagram falls somewhere midway up the sales and marketing funnel, as renters work their way toward finding the perfect dwelling.

“I don’t think Instagram’s primary purpose is transactions, but it is a great way to promote brand awareness, and that may translate indirectly as transactions, eventually,” he says.

For him, slowly growing his Instagram presence through fun posts is better than any website. It’s a mosaic, he says, a composite over time that authentically expresses a building’s singular personality. Which is why Barry doesn’t bother much with hiring professional photographers to take stock shots. “Urby builds pretty, fun, quirky places for people to pose and post, then lets the process unfold organically.”

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Home prices fall for 5th month in a row

Geraldine Grones
other

Home prices fell in February for the fifth consecutive month, with most major markets joining the downward trend.

The Teranet-National Bank of Canada House Price Index, which captures movement in home prices for resales, was down by 0.4% last month from January. The market reached its peak in September, and prices were down by 1.43% from there. Last month’s drop was the largest February drop since 2009.

Compared to last year, the index remains 1.87% higher. The year-over-year increase, however, is the third smallest outside of the recession, with only July and August coming in smaller.

Toronto is falling further from the peak. Prices dropped by 0.22% last month, but they remain 3.56% higher year over year. Peak prices were hit in July 2017, and are still 4.04% lower compared to the 3.83% gap from the previous month.

Vancouver made the second largest drop in the index. Prices fell by 0.68% last month and were down 1.11% from the same month last year. Peak prices were hit in July, and the market is now down by 3.87% from that level.

Meanwhile, Montreal made the largest monthly gain, hitting a new all-time high. Prices rose by 0.36% last month, bringing them 5.15% higher than the same month last year, according to a Better Dwelling report.

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CHMC showed housing starts down

Ephraim Vecina
Canadian Real Estate Wealth

The rest of 2019 might bring with it major risks – including a sluggish national economy and the knock-on effects of previous mortgage hikes – that can lead to less new homes built in Canada’s major markets, CIBC economist Royce Mendes warned.

“Residential investment was downright ugly in the fourth quarter, and the latest reading on housing starts only added to the bad news on Canadian homebuilding,” Mendes told The Canadian Press.

Latest numbers from the Canada Mortgage and Housing Corporation showed that the seasonally adjusted annual rate of housing starts fell from 206,809 units in January to 173,153 units last month, considerably lower than prior predictions of a pace of 205,000.

“Prior to this reading, starts had seen a bit of a renaissance, rising back above 200,000 for four straight months. But the market has been a contending with the effects of higher interest rates and stricter lending standards, and a pace of 200,000 looked unlikely for the year as a whole,” Mendes added.

These figures came after the weakest January of home sales since 2015, according to the Canadian Real Estate Association.

“As a leading indicator of economic activity, February’s steep decline in housing starts may raise some eyebrows in Ottawa,” TD Bank senior economist Fotios Raptis cautioned in a report.

“Although housing starts seemed to be unscathed by the new B-20 regulations that took effect in January 2018, higher borrowing costs and tougher mortgage qualifying conditions may finally be taking a toll on new residential construction.”

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