How Chinese laundered money blew-up Vancouver’s housing market

By Leith van Onselen

According to Global News Canada, Chinese organised crime laundered around $1 billion through Vancouver property in 2016, and $5 billion since 2012, and this partly explains Vancouver’s explosive price growth:

The study findings, obtained by Global News, are a startling look at what police believe to be the massive money laundering occurring in the Vancouver-area real estate market…

While the study only looked at property purchases in 2016, an analysis by Global News suggests the same extended crime network may have laundered about $5-billion in Vancouver-area homes since 2012…

Across the Lower Mainland, prices began to sky rocket in late 2012. Some analysts believe a flood of money from China in recent years forced Metro Vancouver home prices to disconnect from the region’s median household wage…

The findings come amid Metro Vancouver’s housing affordability crisis, in which middle-class families have been priced out of the city. Many of these properties were left empty, and bought on paper by the spouses and children of suspected criminals. Investigators were surprised that some convicted drug trafficking criminals didn’t even conceal their property purchases…

One expert said Canadians would be stunned to learn how many of Vancouver’s homes have been built on drug money since the 1990s, when heroin from Hong Kong and China started flooding into Vancouver and Toronto.

Reports like this immediately lead me to wonder how big money laundering is in Australia, given a 2015 report from the global regulator of money laundering – the Paris-based Financial Action Taskforce (FATF) – found Australian homes are a haven for laundered funds, particularly from China.

Of course, we will never know, since Transparency International has ranked Australia as having the weakest anti-money laundering (AML) laws in the Anglosphere, failing all 10 priority areas.

Similarly, the OECD Working Group on Bribery in International Business Transactions has noted that the entire ecosystem for the buying and selling property using cross-border fund flows is beyond the reach of Australian regulators.

At least Canada’s authorities are taking action. Last month, Canada launched two government reviews into money laundering in British Columbia, in order to identify the scale and scope of illicit activity in the real estate market.

By contrast, Australia’s real estate gate keepers have been exempted from scrutiny, leaving the Chinese free to wash cash through our homes and price-out younger Australians from home ownership:

The government had aimed to pass laws to cover these sectors before the end of this year, following a highly critical report from the international Financial Action Task Force (FATF)…

But the government confirmed the laws will not include the long-awaited coverage of lawyers, accountants, and real estate agents…

Anti-money laundering experts have warned that failing to crack down on the illicit flow of funds flows, including “hot money” from China, has added significantly to Australia’s housing affordability problem.

What a corrupt little nation we have become led by corrupt leaders.

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