Five years ago, in July of 2011, the house at 4182 West 8th Avenue in Vancouver in sold for $4.6 million. It now rests vacant, abandoned and rotting.
Six years ago this $6.2-million Point Grey home boasted unobstructed vistas of the North Shore mountains, English Bay and Vancouver’s skyline. A park sits across a quiet street. The home represents everything a family could aspire to.
As the National Post reports, it too is vacant and rotting. Windows have been left open and debris sits in the yard. Like a symbol of futility, a June 2015 City of Vancouver “untidy-premises” order remains pinned to the door.
The two formerly multi-million mansions devolving to derelict status is not the only thing they share in common: a second uniting feature is what they were meant to become once they were purchased half a decade ago - a store of wealth to Chinese investors eager to park "hot money" outside of their native country, and bid up any Canadian real estate they could get their hands on.
And then the investors disappeared.
The Point Grey property stopped functioning as a home and became a storage of wealth six years ago, according to property documents and a neighbour’s account.
It was well-cared for in 2010 when it was sold to an investor. Since then it has been flipped through a property transfer in a Beijing law office and left unoccupied.
Current owners of the other vacant property residing on the 4100-block 8th Avenue West home are Huai Can Ren and Xue Pei Sun. They bought the home from Wei Min Zhang in July 2011 for $4.6 million.
The couple’s occupations were both listed as "business person." Wei Min Zhang had bought the home in July 2010 for $3.35 million.
Since the purchase, the current "owners" have not been seen.
City hall is currently trying to estimate how many Vancouver homes are vacant. And these online communities are anecdotally gathering photo evidence and coming to conclusions that offshore investment is to blame.
In other words, the "Chinese."
“That is what is driving everything,” said Caroline Adderson, whose website, Vancouver Vanishes, has over 8,000 followers. “It is sickening on all levels."
City of Vancouver spokesman Tobin Postma said a 2015 order to clean up the property was “remedied.” However the order remains pinned to the property and messy conditions appear to continue, according to a reporter’s observations Wednesday.
Postma said city departments respond to safety and mess complaints at vacant homes and issue cleanup orders in warranted cases.
If owners don’t respond, the city will clean up and issue a bill. In 2014, there were 213 actions taken against 85 properties, Postma said.
Huai Can Ren and Xue Pei Sun are also owners of a $3.57-million Arbutus Ridge home in the 2300-block 21st Avenue West, records show.
The home also appears to be unoccupied: on Wednesday, a Postmedia reporter found that the windows were shuttered, a phone book was left on the doorstep and a mailbox was stuffed with letters. No one answered the door and the home’s external condition seemed degraded.
Huai Can Ren, then listed as “businessman,” and Xue Pei Sun, as “homemaker,” bought the home in 2006 for $1.75 million from transferees Zhaohong Su and Xin Li.
In transfer documents, Xin Li was listed as lawyer for Su, who had bought the home in 2005 for $778,000.
Needless to say the locals are furious with this increasing incidence of derelict houses, which destroy neighborhood character. They are also confused how this is allowed to go on.
And in case it is unclear what "this", what is happening is quite simple:
- Chinese investors smuggled out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
- They make "all cash" purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in perso, in cities like Vancouver, New York, London or San Francisco.
- The house becomes a new "Swiss bank account", providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.
- Then the owners disappear, never to be heard from or seen again.
As more Chinese scramble to engage and repeat if only the first three steps, the price of local housing, which is merely a store of value to price indiscriminate foreign buyers, soars while it makes home purchases for the domestic population prohibitively expensive and virtually impossible.
The end result, in the case of Vancouver, is this:
We, and the local residents of Vancouver wonder, "how much longer will such money laundering fraud be permitted?"