Today, a report released by government’s Expert Panel on Money Laundering in Real Estate estimates that money laundering has increased the cost of buying a home by 5%.
With the composite benchmark price for homes in Metro Vancouver at just over $1 million, 5% is an average of $50,000 for every home purchase.
The 5% figure represents a conservative estimate across the province, with the potential impact in areas like Metro Vancouver being much higher.
The panel writes that money laundering “causes prices for all real estate classes to rise above the levels that are supported by local household incomes.” (Page 53)
The report calculates that the house price-to-income ratio for a single family home more than doubled between 2001 and 2017:
Source: Expert panel report, page 43
As public warnings on money laundering in real estate and casinos mounted over a period of years, the BC Liberals refused to take action.
In 2015, experts were calling Vancouver “a critical money laundering hub,” singling out the real estate sector as a particular target. (National Post)
That same year, FinTRAC audited 80 real estate firms in Vancouver and found that 55 had “significant deficiencies” that made them vulnerable to money laundering. (Vancouver Sun)
Last year, the former head of the Integrated Illegal Gambling Enforcement Team, Fred Pinnock, said that when it came to money laundering in casinos, “fault lies at the feet of the B.C. Liberals while they were in government… it was no secret to government. At all.” (Global)
And earlier this week, we learned that between 2013 and 2016, the BC Liberals oversaw a 5,400% increase in luxury car PST rebates used by money launderers.
Through these red flags and many others, the BC Liberals continually downplayed the concerns and refused to take action or any responsibility.