Painful Truth: Greed, real estate, and criminals

Crooks with cash have been putting it into Metro Vancouver land.

It’s probably not the best time to be a money launderer in B.C.

The best time, as we’re learning through a series of media reports, was anytime in the last three or four years. Now, finally, the police, casinos, and provincial and federal governments are beginning to crack down, if only in fits and starts.

In late March, B.C. Attorney General David Eby announced that suspicious cash transactions at B.C. casinos had plummeted. Over the past few years, it turns out people had been turning up at B.C. casinos with millions in cash each month, converting it into poker chips and then back to “clean” money.

This is less a case of the fox guarding the hen house, and more a case of the fox inviting over all his friends, selling the eggs, and using the profits to buy real estate.

And that’s the other side of this situation. We don’t know – and we may never know – how much of Metro Vancouver’s insanely inflated real estate market was caused by local and overseas criminals needing somewhere to stash their cash.

A series of court cases, lawsuits, and criminal investigations are slowly revealing a system in which money launderers and high-rolling gamblers invested in pricey homes.

It’s a chicken and egg situation. The criminals invest in real estate because it’s a safe place to stash their cash, with a nice return on investment. Their buying sprees in turn cause the prices to get jacked up higher, which makes it even more attractive for crooks and speculators, and so on and so on.

So what happens if the crackdown lets some air out of the balloon?

Recent stats from Langley and Surrey keep showing strong growth.

But in Vancouver, sales are down. In some home categories, even prices are going down – sharply, according to some tracking websites.

It might be a blip. It might be seasonal. Prices might start going up again and not stop until only oil billionaires and pop stars can own property.

But maybe not this time. Fingers crossed.

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