Trade Wars, Money Laundering and Communist Plots – Why home values have declined?
Over the last several years the Chinese Communist Party (CCP) has allowed billions of dollars to leave the country. In some years up to $17 billion dollars has been put into the market in Vancouver including up to $5 billion that has been identified as laundered money from untraceable transfers within and between companies controlled from the People’s Republic of China. That is a lot of money even before considering the multiplier effect of subsequent transactions. This has had a profound distorting effect on the market. In 2018 the President of the Royal Bank stated that “we do not need foreign capital using Canadian Real Estate as a piggy bank”. But that is exactly what has happened. Then last year the CCP clamped down on funds leaving China. While some see the vacant home tax, foreign buyer’s tax, and the speculation tax as causing a decline in property values these are really after the fact treatments and do not deal with the root cause of market over inflation.
Despite the present real estate reality, I have confidence in the real value of Vancouver, and I am available to advise you as a buyer or a seller. To understand what the impact of the current situation is on the value of your home call me for a free no obligation market evaluation.