An estimated $5.3 billion of laundered money into B.C. real estate in 2018 hiked housing prices 5 per cent, two special reports released Thursday by the provincial government show.
However since the figures are for the entire province and based on incomplete data and methodologies, the impact of money laundering on specific regions, such as Greater Vancouver, could be much higher, said Minister of Finance Carole James.
“Our housing market should be used for housing people, not for laundering the proceeds of crime,” said James, via a news release.
Conservative estimates from a report from professors Maureen Maloney, Tsur Somerville and Brigette Unger titled Combatting Money Laundering in BC Real Estate indicate $7.4 billion of money laundered in B.C. in 2018, of which two-thirds filtered through housing.
The Maloney report notes: “If all the investment were residential property in the Lower Mainland and Fraser Valley, $5.3 billion of investment would represent 7.4 per cent of 2018 transaction volumes. Share transactions in the 4.6 per cent to 7.4 per cent range are sufficiently large to have an observable impact on real estate prices.”
The Maloney report was released alongside Dr. Peter German’s Dirty Money – Part 2 report.
Dirty Money - Part 2 by on Scribd
James noted there’s been a 70 per cent increase in property value over a three-year period in the Greater Vancouver region.
Eby said a decision on a public inquiry into money laundering in B.C. is imminent.
This story will be updated.