David Eby, MLA for Vancouver-Point Grey, is questioning how people are actually buying homes in Vancouver, after finding nine students own property here worth $57.1 million.
The homes range in value from $1.85 million to $31.1 million, are all in Point Grey, and all name a student as an owner. In three cases, ownership is shared with another person.
Four of the home purchases were supported by mortgages totalling $40 million from CIBC, HSBC, and BMO. That’s a red flag, in Eby’s opinion.
“The question should be asked whether these banks have issued mortgages to students who have no apparent source of income,” said Eby at a press conference Wednesday.
“How do these students qualify for mortgages? Where did the money coming from? How is it that they’re playing such a large part in the real estate market in Vancouver?”
Eby says he came across the homeownership details in the course of research he was carrying out with Andy Yan on real estate west of Alma St.
The pair looked at 172 titles of recent real estate transactions in the area in a six-month period; the cases of these nine homes struck them as particularly odd.
Because of the limited data available in the land title system, Eby says, he doesn’t know the details of the students’ financial situations or possible income.
“But we’re saying, ‘Gosh, it’s really strange that students have millions of dollars in disposable income to buy and sell homes in Point Grey.
“Wouldn’t that be worth investigating… for tax and banking implications, in terms of the consequences this could have for the larger real estate market?'”
In the last year, Eby says, one of the students even flipped their house for a massive profit, buying it at $7.1 million, and selling it for $8.35 million.
“It certainly does raise serious questions over whether the title ‘student’ is appropriate for somebody who is flipping real estate and making a million dollars here.”
Eby admits this is only a small sample, but says he wants the province to investigate the issuing of mortgages to people with no apparent source of income.
“They have to immediately review land transactions in the last two years in Metro Vancouver to identify how widespread the issue is,” said Eby.
“The only way to do that is, as we’ve been saying for a year, to link up real estate transaction data to the income tax system.”
Eby also wants the provincial government to pressure the federal government to change the rules to ensure Canadians have the same borrowing ability as international residents.
“Bank lending policies… favour internationals over Canadian residents by not requiring a proof of income in order to buy a home with a Canadian mortgage,” said Eby.
“It’s absolutely outrageous that a Canadian who’s working, living and paying taxes in BC has to… cross even more hurdles than somebody who is not a BC resident.”
Eby says homebuyers who do not live or pay income tax in BC should have to provide extra information to demonstrate their source of income instead.