This article confirms that B.C. real estate might be the alternative to the Swiss bank account for large sums of money flowing out of China. The problem is that some of this money, estimated in the article at billions of dollars, is owed to Chinese banks.
These same banks were reported recently to have about $300 billion US in non-performing loans on their books. And now the banks want to protect their depositors in China by taking action to collect on these duff loans.
Coupled with the new 15 per cent property-purchase tax levied on non-residents, this move by the banks could further destabilize the Vancouver real-estate market.
First, there could be a negative impact on supply if numerous properties are kept off the market when Chinese creditors obtain so called Mareva injunctions. This could be followed by an avalanche of properties hitting the market after successful foreclosure cases wind their way through the courts.
In the meantime, all sorts of shenanigans could take place as debtors try to transfer titles fraudulently to avoid injunctions.
Legitimate buyers of property that would otherwise have been subject to injunctions might also find themselves caught in a legal morass.
Charles Woodruff
Oak Bay
