Vancouver Mayor Gregor Robertson is angry at property developers who are avoiding the new Vacant Home tax he launched this fall.
When the Tax against foreign ownership was introduced there was an immediate dive in the market that indicated it was working. Read More Vancouver home sales drop nearly 33% in September
Now it has been revealed that Sales continued as property developers found a way to avoid the city’s meddling altogether.
The Condo Futures market copied the pork bellies, AirBnB, Bitcoins, Uber
Greedy and creative Vancouver developers mixed virtual reality with commodities and created Condo Futures. Rather than build properties that will owe the tax, they are selling un-built virtual condos. Offshore investors who loved the safety of Canada for their investments, now can avoid all property tax and even maintenance costs.
“The tax really opened our eyes to new possibilities” says a property insider. “we were building for people who had no intention of living in our homes, so why build them? We mixed AirBnB and Uber for renting things they don’t have, Bitcoins for starting their own economy and the Chicago commodities market where people invest in pork bellies that aren’t even born yet”
The result is the continuation of a lucrative market for property developers without adding anything into the economy. Mayor Robertson is furious with the developments but so far there is not much he can do about it. Early warnings against government intervention in free markets may now be ringing true.
Real estate insiders say this may be the fastest growing trend in the business. Only a few large developers are involved with thousand of offshore investors so they have been able to keep it hidden.