The Media Crisis In Vancouver’s Housing Crisis: Alternative Mortgage Lendersadmin November 17, 2018 0 COMMENTS
OnePacificNews, November 17 2018, Saturday
Ng Weng Hoong
StarMetro (story below) has finally published one of the most important but under-reported stories of the Metro Vancouver housing market of recent years.
Subprime lending provided by alternative mortgage lenders (AML) has been a major factor fuelling the region’s housing bubble. Canadians who do not qualify for mortgages from the big banks have been turning to AMLs, thus driving up home prices.
Credit goes to Jen St Denis, but why has it taken so long for any mainstream reporter to play up and draw attention to this obvious story? That’s because the media much prefer to focus on Chinese buying and offshore demand.
Canadians taking on record volume of debt every year to buy real estate is the elephant in the room that the media has failed to adequately highlight. No wonder there’s been so little by way of news and analysis on this issue the last few years. The media has found it easier to blame outside forces like foreign capital than to focus on the domestically-generated debt crisis.
If there’s an immediate threat to the Canadian economy, it will be housing-related debt.
Academics have also failed to study the AMLs. David Ley and Josh Gordon, the prime movers for the Chinese buying story, have offered little research into Canada’s debt-generated housing crisis.
The rush to blame Chinese demand has had political implications, influencing the outcome of British Columbia’s provincial election in May 2017 and Metro Vancouver’s municipal elections in October 2018.
It hit a new low in June when BC’s attorney general, David Eby, released his Dirty Money report claiming casino-laundered money brought in by Chinese criminals has been fuelling the Metro Vancouver housing market. While Chinese money laundering certainly exists, its impact on the region’s housing prices as alleged by the report’s investigator Peter German has been hugely exaggerated. Mr Eby, Mr German and many in the media failed to mention that Vancouver has been home to money laundering, drug dealing and gang activities for decades. Vancouver has been Sin City long before River Rock Casino was built, and well before the Chinese had money. Vancouver’s criminals don’t need Chinese crooks to teach them how to launder money and buy real estate.
The mainstream media and academia should start investigating the whole range of factors fuelling the housing market.
They should highlight ALL OF THEM, and stop focusing only on Chinese money.
Subprime lending — as well as the risk that comes with it — is growing in Canada’s hottest real-estate markets
_There are no studies for Vancouver or BC; not known how many properties have mortgages from private lenders, which are normally higher-interest, short-term loans of up to one year.
_Private lenders are usually less concerned with borrowers’ incomes than with property equity that can be used to cover the loan.
By Jen St. Denis, StarMetro Vancouver, Wed, November 14, 2018