The NDP’s housing critic is calling on the provincial and federal governments to crack down on international buyers with little or no income who get huge mortgages to buy and flip local properties.
David Eby says his research found nine properties in Vancouver’s Point Grey worth $57.1 million in total that are owned by people listed as ‘students.’
Seventy per cent of those properties by value were supported by mortgages issued by some of Canada’s major banks.
When his team took a closer look at these properties, one of the students they identified, Eby says, bought a $7.1-million house and flipped it for $8.35 million, netting a profit of more than $1 million.
“So this is a student who has been very successful in real estate,” says Eby.
That particular transaction did not involve mortgage financing, but Eby says it raises serious questions about whether the title of a ‘student’ is appropriate for someone who is flipping real estate and making a million dollars doing it.
Eby says it also raises serious concerns about the bank policy of lending so much money to people with no apparent source of income when Canadians, by comparison, have to jump through many hoops to qualify for a mortgage.
“It’s absolutely outrageous that a Canadian who’s working, living and paying taxes in British Columbia has to provide even more information and cross even more hurdles than somebody who is not a British Columbia resident and isn’t paying taxes and living here,” says Eby.
In July, the provincial government issued a 15 per cent foreign buyer tax to help cool down the red-hot real estate market in Metro Vancouver. However, a poll released on Wednesday suggests British Columbians have little faith the tax will actually accomplish anything.