METRO VANCOUVER (NEWS 1130) – It looks like people in Metro Vancouver are holding onto their cash a little more these days.
Statistics Canada suggests the regional retail market has declined, and largely attributes that decrease to a flat housing market, combined with money laundering.
Data shows people are buying less, compared to the same time last year.
David Ian Gray, a retail specialist with DIG360, says when people aren’t buying houses, they’re also not spending money on things that go in them.
“When there’s home sales, there’s a lot of ancillary spending on retail, both in terms of renovations and building supplies, landscaping, that sort of thing,” he explains. “But also, remodeling and interior designs — the home furnishings and furniture.”
Additionally, the crackdown on money laundering in B.C. casinos has people on the lookout for shady transactions, which are also felt in the luxury automotive market, he adds.
“We’ve also seen the very high end luxury automotive has been caught up in that. I wouldn’t doubt that there’s other chilling effects on the really high end of luxury retail as a result of the crackdown and the spotlight on the laundering issue,” Gray says.
The money being moved through condos and casinos has shifted towards cars, likely because automobiles haven’t been gaining as much attention, Gray says, but he notes that’s beginning to change.
“Money laundering happens everywhere but the extent has been very pronounced in Vancouver, stemming from the ongoing casino investigation. Because this is an underground economy we don’t have numbers on that but we’ve seen them move from condos and casinos to high-end luxury cars. So, there’s no reason in my mind that other high end luxury items aren’t also a part of the laundering story of people buying things with duffel bags of cash.”
The Metro Vancouver area is faring worse than Toronto and Montreal, which are both seeing growth while Vancouver is experiencing a decline.
Statistics Canada’s numbers show overall retail sales were down in Metro Vancouver by 0.6 per cent this past May, compared to the same time last year. By contrast, they were up by more than five per cent in both Toronto and Montreal.
-With files from Alison Bailey