A $31.1 million Vancouver property was bought by a “student,” according to reports that came out this week.
And this one report shows the weakness in the system that is denying local residents the ability to purchase homes.
Another report, also released this week, states that both the federal and provincial governments are “complicit” in allowing or helping foreign buyers, specially those from China, to use Metro Vancouver real estate as a cash safety box, using real estate here to safely keep money earned in Asia while not paying any taxes in BC – and in the process crushing the dreams of local taxpayers who want to buy homes.
Also this past week, Finance Minister Mike de Jong has come up with a weak-kneed solution – barring realtors from “shadow flipping” – in other words selling one property many times without the knowledge of or without any benefit to the property owner (realtors keep the cash in shadow flipping).
Shadow flipping is a minor problem in the real estate industry – compared to the inability of locals to purchase homes. Opposition NDP leader may be right when he says de Jong’s solution is only fixing a symptom but not fixing the problem itself.
But how can poor de Jong be expected to take any strong action when his political boss, Premier Christie Clark, has openly declared she does not want to interfere in the real estate industry.
Meanwhile, the issue of the student buying a multimillion dollar property has led to anger among those unable to buy a homer in the city they live and pay taxesin.
The majority owner of the Point Grey mansion that was sold earlier this year by Canaccord founder Peter Brown for a record $31.1 million is a “student,” property records show.
Land title documents list Tian Yu Zhou as having a 99-per-cent interest in the five-bedroom, eight-bathroom, 14,600 square-foot mansion on a 1.7-acre lot at 4833 Belmont Ave.
Zhou’s occupation is listed as a “student.” The other owner of the property, which boasts sweeping views of the North Shore mountains and Vancouver, is listed as Cuie Feng, a “businesswoman.”
Feng has a one-per-cent interest in the property, which was assessed this year as having a total value of about $25.6 million, records show.
NDP housing critic David Eby said the fact that a student was able to buy one of the most expensive homes in the city contradicts the government’s messaging that “everything is under control in the Vancouver real estate market.”
Eby said it also links to a theme uncovered in a 2015 study by Andy Yan, an adjunct professor at the University of B.C., which found homemakers and, to a lesser extent, students, are often the listed occupations of the owners of many newly purchased multi-million dollar Vancouver properties.
“It’s incredibly strange that a student would be able to afford such a luxurious and multi-million-dollar property,” said Eby. “This is part of a trend of homemakers and students mass-buying property. I don’t know how that can be possible with the income of homemakers and students typically have, which is close to zero.”
Mortgage documents attached to the land title papers show that a mortgage of $9.9 million was taken out by Zhou and Feng from the Canadian Imperial Bank of Commerce on April 28. The bi-weekly payments are listed as $17,079.41.
Eby said the government’s messaging and slow response to the housing crisis in Metro Vancouver could be because party donors, like Brown, are directly benefiting from the red-hot market.
According to financial records, Brown has donated $62,500 to the B.C. Liberal Party in the past two years, and Eby further noted that Brown is a longtime Liberal fundraiser.
“I think we shouldn’t underestimate the connection between the government saying there is no issue with the real estate market in Vancouver at the same time one of their major fundraisers is selling his home to a student for $31 million and significantly over the assessed value,” said Eby. “The government’s donors are directly profiting from this crazy real estate market while a lot of hard-working families are suffering.”
Eby may be on the right track. If he is not right, then the Liberal government should explain why he is not right. In any case, both the federal and provincial governments should take immediate action to ensure that locals are able to afford homes in their own cities and province.