Vancouver

Nearly two years after we first observed that Vancouver's soaring real estate market is nothing but a bubbling melange of criminal Chinese oligarch "hot money", desperate to get parked offshore in any piece of real estate, but mostly in British Columbia regardless of price, a new multi-year investigation has uncovered extensive links - including money laundering and underground banking - between China's criminal underworld and British Columbia drug and casino cash and VIPs, as well as their connections to China, Macau and the notorious triads.

Last summer we declared that "China's favorite offshore money laundering hub is officially no longer accepting its money" after the city of Vancouver slapped a 15% tax on foreign real estate buyers.  The tax was intended to curb a massive real estate bubble which had resulted from an influx of Chinese money over the preceding years.  The move seemingly worked as it resulted in a staggering and immediate 96% drop in foreign buyers (see: Foreign Buying Plummets In Vancouver: Sales To Foreigners Crash 96%). 

If there is one thing Vancouver has a lot of, it's expensive houses.

As we showed earlier in early June, the world's biggest housing bubble defied impossible odds, and less than a year after the British Columbia government imposed a 15% property tax on foreign buyers, soon after an initial dip, home prices rebounded right back to all time highs, rising 5% to a record C$1.8 million in May, while the number of properties sold was the third-highest ever for that month.

Two weeks ago, a key China-linked concern that made headlines back in 2013 and 2014 reemerged after an extensive analysis by Reuters reporter Engen Tham found that China's "ghost collateral" problem, or collateral that was either rehypothecated between two or more loans, or simply did not exist, had not only not gone away but was still as prevalent as ever if not worse.

One month ago, we said that "the Vancouver housing bubble Is back, and it's (almost) bigger than ever."