An estimated $5.3 billion worth of real estate transactions in B.C. last year were the result of money laundering, helping fuel the meteoric rise of housing prices in the province, according to a new report.
An expert panel on dirty money in the real-estate market estimates that five per cent of purchases in 2018 were made for laundering purposes, contributing to about a five per cent rise in home prices.
The effect could be more significant in certain markets, including Metro Vancouver, according to the panel.
Altogether, dirty money in the real estate market accounted for an estimated 72 per cent of the $7.4 billion that the experts believe was laundered in B.C. last year.
“Our economy should work for regular people, not criminals,” said Finance Minister Carole James. “Housing should provide shelter, not a vehicle for proceeds of crime.”
The report was one of two released Thursday that examine the influence of money laundering in B.C.’s real estate market. Both paint an alarming picture of how criminals are using homes to clean their cash.
Criminal law expert Maureen Maloney was chair of the panel, which made 29 recommendations for dealing with the problem.
Former RCMP deputy commissioner Peter German produced the second report, nicknamed Dirty Money 2, which outlines some of the red flags that signal when illegal money is behind a real estate purchase — including unfinanced purchases, private lending, unusual interest rates and purchases by nominees.
Both documents identify numerous gaps in B.C. and Canada’s systems for keeping track of purchases and reporting suspicious transactions.
The reports are just the latest entries in German’s ongoing investigation into how proceeds of crime are being cleaned in B.C.
Earlier this week, he released some explosive findings on money laundering in the luxury vehicle sector, information that Attorney General David Eby called “incredibly disturbing.”
A year ago, German issued a report detailing extensive links between dirty money and B.C. casinos.
This story originally appeared on CBC