In a statement last Friday, British Columbia Premier Christy Clark revealed that her government is set to close a regulatory loophole that has allowed “shadow flipping” to proliferate in the province and caused housing prices to soar in the past few years.
As reported by CBC News
, Clark said that shadow flipping—where a broker assigns a property multiple times to several buyers before the deal’s closing date—is emblematic of the “pure, naked greed” that has taken the industry hostage, “and the way to end the practice is to take the profit out of it.”
“Those who break the rules, I hope will lose their licence,” the premier stated. Clark said that no legislation is needed for the regulatory change, which would compel sellers to give informed consent on any assignment put in place.
The Real Estate Council would be responsible for the new rules and the associated penalties that “greedy, shady” industry players would face.
Clark confirmed that ministers Mike de Jong and Rich Coleman are set to discuss Vancouver housing supply and affordability with mayor Gregor Robertson, who has expressed his approval and support for the B.C. government’s move to clamp down on shadow flipping.
Robertson said, however, that rampant speculation is also to blame for the continuous growth in the city’s housing prices.
“Premier's commitment to banning shadow flipping is good first step to reduce toxic speculation in B.C. housing market,” Robertson wrote on Twitter. The mayor has previously called for the imposition of taxes on real estate speculation.
“Also need new government tools to create level playing field, protect affordability,” he added.