A Vatican judge on Saturday indicted 10 people, including a once-powerful cardinal, on charges including embezzlement, abuse of office, extortion and fraud in connection with the Secretariat of State’s 350 million-euro ($512 million Cdn) investment in a London real estate venture.
The president of the Vatican’s criminal tribunal, Giuseppe Pignatone, set July 27 as the trial date, though lawyers for some defendants questioned how they could prepare for trial so soon given they hadn’t yet formally received the indictment.
The 487-page indictment request was issued following a sprawling, two-year investigation into how the Secretariat of State managed its vast asset portfolio, much of which is funded by donations from the faithful. The scandal over its multimillion-dollar losses has resulted in a sharp reduction in donations and prompted Pope Francis to strip the office of its ability to manage the money.
Five former Vatican officials, including Cardinal Angelo Becciu and two officials from the Secretariat of State, were indicted, as well as the Italian businessmen who handled the investment.
Vatican prosecutors accuse the main suspects of bilking millions of euros from the Holy See in fees, bad investments and other losses related to financial dealings that were funded in large part by Peter’s Pence donations to the Pope for works of charity. The suspects have denied wrongdoing.
One of the main suspects, Italian broker Gianluigi Torzi, is accused of having extorted the Vatican of 15 million euros to turn over ownership of the London building in late 2018. Torzi had been retained by the Vatican to help it acquire full ownership of the building from another indicted money manager who had handled the initial investment in 2013, but lost millions in what the Vatican says were speculative, imprudent deals.
Vatican prosecutors allege Torzi inserted a last-minute clause into the contract giving him full voting rights in the deal.
The Vatican hierarchy, however, signed off on the contract, with both the Pope’s No. 2, Cardinal Pietro Parolin, and his deputy approving it. Neither was indicted. In addition, Francis himself was aware of the deal and Torzi’s involvement in it.
Vatican prosecutors say the Vatican hierarchy was hoodwinked by Torzi and aided in part by an Italian lawyer — who was also indicted Saturday — into agreeing to the terms. The Secretariat of State intends to declare itself an injured party in the case.
Torzi has denied the charges and said the accusations were due to a misunderstanding. He is currently in London pending an extradition request by Italian authorities, who are seeking to prosecute him on other financial charges. His representatives said they had no immediate comment Saturday since they hadn’t yet seen the indictment.
Cardinal declares ‘absolute innocence’
Also indicted was a one-time papal contender and Holy See official, Cardinal Angelo Becciu, who helped engineer the initial London investment when he was chief of staff in the Secretariat of State.
Francis fired him as the Vatican’s saint-making chief last year, apparently in connection with a separate issue: Becciu’s 100,000-euro donation of Holy See funds to a diocesan charity run by his brother.
Becciu had originally not been part of the London investigation but was included after it appeared that he was behind the proposal to buy the building, prosecutors say, alleging that he also interfered in the investigation.
In a statement Saturday issued by his lawyers, Becciu insisted on the “absolute falsity” of the accusations and denounced what he said was “unparalleled media pillory” against him in the Italian press.
“I am the victim of a plot hatched against me. And I have been waiting for a long time to know any accusations against me, to allow myself to promptly deny them and prove to the world my absolute innocence,” he said.
One of Becciu’s proteges, self-styled intelligence analyst Cecilia Marogna, was indicted on separate embezzlement charges. Becciu had hired Marogna as an external consultant after she reached out to him in 2015 with concerns about security at Vatican embassies in global hot spots. Becciu authorized hundreds of thousands of euros of Holy See funds to her to free Catholic priests and nuns held hostage in Africa, according to WhatsApp messages reprinted by Italian media.
Her Slovenian-based holding company, which received the funds, was among the four companies also ordered to stand trial.
Marogna says the money was compensation for legitimate intelligence work and reimbursements. Prosecutors say she spent the money on luxury purchases that were incompatible with the humanitarian scope of her company.
In a statement Saturday, her legal team said Marogna had been prepared for months to “provide a full accounting of her work and fears nothing about the accusations made against her.”
Alleged abuse of office
Also indicted were the former top two officials in the Vatican’s financial watchdog agency, for alleged abuse of office. Prosecutors say by failing to stop the Torzi deal, they performed a “decisive function” in letting it play out.
The lawyer for the former office director, Tommaso di Ruzza, said he had only seen the Vatican press statement about the allegations but insisted that his client “has always acted in the most scrupulous respect of the law and his office duties, in the exclusive interest of the Holy See.”
The former head of the office, René Bruelhart, defended his work and said his indictment was a “procedural blunder that will be immediately clarified by the organs of Vatican justice as soon as the defence will be able to exercise its rights.”
A former Secretary of State official, Monsignor Mauro Carlino, expressed shock at his indictment on alleged extortion and abuse of office charges, saying his only involvement in the deal was after he was ordered by his superiors to negotiate Torzi down from a 20 million-euro fee to 15 million euros.
“It seems incomprehensible that a worthy act … that brought him no personal advantage and had on the contrary provided a significant savings for the Secretariat of State, could lead to an indictment,” said a statement from his lawyer, Salvino Mondello.
In Ontario, real estate buyers are holding out for a price cut – The Globe and Mail
The stalemate that is taking hold in the Ontario real estate market right now arises from a belief that is becoming more entrenched each month: buyers reckon prices have farther to fall.
House hunters see properties in some areas selling at 15 per cent or so below the high-water mark set in the first quarter and decide to hold off for an even steeper discount. Sellers either refuse to budge or feel the landscape shifting under them and rush to complete a transaction before more ground crumbles away.
The war in Ukraine, stubborn inflation and the rise in interest rates have precipitated a much more tumultuous real estate market than industry watchers were predicting even a few months ago, according to John Lusink, president of Right at Home Realty.
Mr. Lusink says sales for June are set to come in about 26-per-cent below even his conservative projections at the start of the year, continuing a trend that has been on a downward slope since February.
“We can throw that forecast out the window,” he says of his projections for 2022.
The landscape is the same across the Right at Home network, which spans 12 regions of Ontario.
The number of listings, meanwhile, is gradually increasing after a slow spring, he adds.
Mr. Lusink expects the final tally for Right at Home’s sales in June to show a 37-per-cent drop from the same month last year.
“It’s, needless to say, concerning.”
Rishi Sondhi, economist at Toronto-Dominion Bank, points out that sales and prices have fallen disproportionately in Ontario and British Columbia, where prices climbed the most during the pandemic. The retrenchment in activity is especially hard in the Greater Toronto Area, where investors have played a particularly large role in the past year.
The downturn is part of a worsening picture across Canada, as sales and prices continued to decline in May under the weight of higher interest rates, Mr. Sondhi points out. Some sales were likely pulled forward to late 2021 and early 2022 as people braced for higher rates, he adds.
The economist says some GTA buyers also likely purchased new homes before selling existing properties, expecting the market would remain hot, he adds. Those sellers may be forced to accept lower prices now in order to complete the new deal, but he expects that dynamic to run its course before too long.
Mr. Sondhi is forecasting a continuing decline in prices throughout the rest of the year as a reflection of sharply higher interest rates.
Alongside the buyers betting that prices will slide, Mr. Lusink says, stands another cohort ready to buy – but the task has become much harder with the rise in rates. One buyer Mr. Lusink spoke with recently had obtained a fixed-rate mortgage at 4.3 per cent, which is almost double the rates buyers were able to lock in just a couple of years ago.
The mortgage “stress test” requires borrowers to show they can handle mortgage rates approaching seven per cent and above, he points out.
A recent survey commissioned by Right at Home also shows a shift in attitudes: Only 19 per cent of potential first-time homebuyers in Ontario plan to buy in the next two to three years, compared with 30 per cent who planned to buy in 2021, according to the study.
The percentage of homeowners planning to sell who are doing so to take advantage of current market conditions increased to 23 per cent this year from 11 per cent last year, the data shows.
The Maru Public Opinion Survey polled 813 Ontario adults in May and has an estimated margin of error of plus or minus three per cent 19 times out of 20.
In Burlington, Ont., real estate agent Tanya Rocca is already seeing homeowners preparing properties for sale before the fall market arrives.
“It’s very busy right now,” says the agent with Royal LePage Burloak Real Estate Services. “People are panicked.”
Ms. Rocca says prices in the area which have dropped between 12 and 15 per cent from the February peak.
The average price of a freehold property dropped to $1.431-million in May in Burlington, she says, compared with the $1.51-million buyers were paying in April and the $1.6-million in February and March.
The affluent city, which sits on Lake Ontario west of Toronto, was one of the many communities that saw a large influx of buyers during the pandemic as people sought more space. Burlington’s historic downtown core and large selection of detached houses with pool-sized lots have made it very popular with families.
Ms. Rocca says many buyers didn’t even have a chance at a house in the midst of ferocious bidding wars; now people have their choice of properties.
Some current sellers have been caught in the market transition, Ms. Rocca adds, because they bought a new property before selling an existing one.
“Buyers, in fairness, are getting the power back – which they love,” she says. “There are great opportunities out there because people need to sell.”
Ms. Rocca was shocked at some homeowners earlier this spring who were disappointed on offer night when they received bids that came in $300,000 or $400,000 above the asking price.
“People were debating whether they should take it.”
She recalls one pair of homeowners with a home backing onto a golf course who listed their property with an asking price of $2.5-million. The sellers were disappointed they didn’t receive a hefty amount above asking.
“They got their asking price literally the week things started to shift,” Ms. Rocca says. “They were so close to not taking it.”
As the summer begins, it’s not uncommon to see listings sitting with 30 to 50 days on market, she adds.
In the current environment, Ms. Rocca recommends setting a price near the realistic market value. She often “sharpens” it a little bit to make it more attractive compared with other competing properties in the area.
To help homeowners come to terms with the new reality, she stresses that first-quarter prices were the result of an overheated market – not an accurate reflection of value.
“This is not money they’ve lost – they never had it.”
Ms. Rocca says some people who purchased properties in Burlington at the beginning of the pandemic are now being called back to offices in Toronto. With more cars on the road and the price of gas skyrocketing, many are reluctant to commute.
“People were making such rash decisions during COVID,” she says, adding that some of those folks are now selling and moving back to the GTA.
With such an extended run-up in real estate prices while rates were low for years, the market in Ontario saw a few blips but no real correction, she points out. A move to restore balance is healthy, in her opinion.
“I think we’re going through a cycle right now which is very much needed.”
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OSFI makes real estate loan changes aimed at reducing lender risk – Investment Executive
Regulators are also forming a new advisory committee to review SRO consolidation
- By: IE Staff
- June 27, 2022
June 28, 2022
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Three-year plan focuses on CFR enforcement, dispute resolution and crypto
Is Summer the Right Time to Sell Luxury Real Estate in the GTA? – Storeys
Some of the Greater Toronto Area’s (GTA) most exclusive luxury neighbourhoods shine brightest in the summertime, in all of their tree-lined, manicured lawn, and swimming pool-filled glory.
From Forest Hill and Rosedale, to The Kingsway, the warmer weather makes these breezy neighbourhoods even more picture-perfect, adding to the curb appeal of their sprawling homes.
But is the summertime the right time to list your home on the luxury market in the GTA? It can be — but there are a few important considerations to take into account.
“Summer is always a slower time for luxury real estate in the city,” says Andy Taylor, Senior Vice President of Sales at Sotheby’s International Realty Canada. “For many, this is the season to get away to the cottage. Especially after the pandemic, more and more people have cottages that they’re escaping to on the weekends, instead of staying in the city to list their home.”
A lot of the higher-end luxury inventory has been kept off the market during the summer months, says Taylor. “Instead of posting it to the Multiple Listing Service (MLS), agents are selling luxury homes as exclusives,” he says. “Although there are transactions happening in the luxury market, they’re not being captured by MLS. This summer in particular, we will continue to see transactions, but the volume of transactions will slow down.”
Sotheby’s currently has a handful of multi-million-dollar properties — including The Residences at the Ritz Carlton, 125 Cumberland, and a $10.75 million property in Rosedale — that are all exclusive listings.
When it comes to buyer trends, Taylor says that those in the market for a luxury listing are seeking specialty properties that are finished and require little planning or work. “Homebuyers don’t want to work on renovations, especially in the summer, as they’re looking to travel or go to the cottage,” says Taylor. “Recently, there have been a lot of delays when working with contractors, so buyers aren’t able to get their finishings done as quickly as anticipated. Properties that require a lot of work are sitting, whereas homes that show exceptionally well are getting offers and are selling a decent price point.”
In addition to completed properties, the GTA’s luxury home seekers have their eyes out for amenities. “For the luxury homebuyer, they want a unique property that has already been completed and comes with high-level amenities,” says Jodi Allen, Senior Vice President of Sales at Sotheby’s International Realty Canada. “For instance, high-quality finishes, nice layouts, room for an office, a gym, and high ceilings are all on the luxury buyer’s wish list. Right now, a lot of buyers have also been asking about pools. Travel has been hectic lately and buyers are looking to stay in Toronto or travel to the cottage, so having a pool is key for the summertime staycation.”
Taylor and Allen highlight how the spring weather brought a shift in the Canadian real estate market. After a red-hot and often record-breaking run, GTA home prices finally started to soften as of late and the market has dialled back the drama.
“The media has been focusing on the slowdown of the market, which has impacted buyers as they’re taking their time to make decisions and there’s much less urgency than what was seen from March to May,” says Taylor. “Properties aren’t being offered with an offer date, instead they’re being marketed with what the agents are feeling is the true value of the property. For sellers, their expectations of price haven’t changed, whereas buyers are expecting a price decrease.”
Sellers are starting to realize that properties have to be priced properly in order to sell, according to Taylor. “If sellers are planning to test the market with a high price point, they shouldn’t bother listing,” says Taylor. “For buyers, under-pricing and holding back on an offer is also not working well, so the majority of agents are no longer taking this approach. Currently, pricing properties accurately is very important to both parties.”
Allen agrees that the biggest mistake sellers are making right now is in the price department. “Right now, you can’t play aggressive and throw a high price on a property just to test the market,” she says, driving the point home. “Instead, sellers need to price their property where it shows value.”
For those looking for a luxury Toronto property, the pickings are slim in some of the most coveted neighbourhoods.
“We’re actually seeing a lack of inventory in neighbourhoods like Rosedale, The Annex, and Yorkville, but in Lawrence Park there’s been an increase,” says Allen. “The downtown area — which mostly consists of luxury condos — had also been quiet recently, but is now just starting to pick up again. As the shock and awe of interest rate hikes begin to cool down, we should see the showings come back to reflect a traditional summer market in these key neighbourhoods.”
For those considering selling their luxury property in the summer months, Allen says that the most important thing to remember is that you don’t want the listing to go stale.
“In the summer, sometimes it’s best to keep a listing exclusive which puts pressure on the agents to work harder, make calls, and build the awareness of property,” says Allen. “We’re still not sure what the fall market will look like, so some would say that it’s best to list a home during the summer, even though it’s slower. For most of our GTA listings, we’re keeping them exclusive before putting them on MLS in September.”
Allen also advises sellers to ensure that the listing looks like a model showroom and reflects the amenities that are important in the summertime. “For example, sellers should make sure that the outside of their home is staged, the gardens have been taken care of, the barbeque has been cleaned, and the deck furniture is set up,” she says. “People tend to visit the outside of a home first before going outside, so it’s important that the exterior is a good representation of the property.”
Finally, Allen says that it’s important that the pictures of the listing reflect the season. “At Sotheby’s International Realty Canada, we make sure that all photos and videos of our listings are up-to-date, which gives the buyer a real insight into what the property currently looks like,” says Allen.
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