The B.C. Government says it is ending the practice of shadow flipping in Vancouver’s real estate market.
Speaking in Stanley Park Friday morning, Premier Christy Clark said they are not waiting for a review of shadow flipping to be done – they are moving to end the practice now.
Shadow flipping is controversial. It involves brokers reselling a property multiple times before a deal closes and profiting from each transfer using the assignment clause in sales contracts.
Clark said there needs to be informed consent provided for any assignment and any profits made must go back to the seller. She said taking the profit out will stop these “shady deals.”
She added they still have some details to work out, but they hope to have this in place in the next few weeks to a month.
“In a fast-rising market, some individuals seek to profit at the expense of homeowners and buyers,” said Clark. “Today’s steps address immediate concerns while the Real Estate Council’s independent advisory group conducts its review and brings forward further recommendations on practices in the market. We will work with the City of Vancouver, and then other local governments and the UBCM, on housing affordability issues such as supply and taxation.”
Finance Minister Mike de Jong and Deputy Premier Rich Coleman will also meet with Vancouver Mayor Gregor Robertson to discuss steps to improve affordability in Vancouver.
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In a few tweets, Gregor said this is a good first step.
Housing affordability in Vancouver has been an important topic for residents for many years.
On Wednesday, more than 700 residents attended a public forum on Metro Vancouver’s housing crisis. Many at the meeting said all three levels of government should be doing more to curb runaway real estate prices and increase housing supply.
Among the solutions offered — taxing foreign property owners and speculators.
“If it’s a pied-à-terre and you’re not earning any money in Canada and you’re wealthy from elsewhere, yes you have to pay a higher property tax,” said Thomas Davidoff of UBC’s Sauder School of Business. “If you leave it vacant, of course you’re going to pay a higher property tax. But you can invest in property, rent it out and you’re off the hook.”