(Pixabay)

B.C. speculation tax to cause vacation property price dip: forecast

Royal LePage estimates tax on some buyers will convince a wave of owners to sell vacation homes

British Columbia’s new speculation tax on out-of-province buyers will likely convince a wave of owners to sell their vacation properties, pushing down home prices, said a forecast from Royal LePage.

By the end of September, the real estate company is expecting the average price of a recreational home in B.C. to reach $531,333, a 2.8 per cent drop from last year’s average of $546,444.

Under B.C.’s speculation regulations, owners outside the province will be taxed 0.5 per cent this year, but next year will see the rate climb to 2 per cent for foreign investors and 1 per cent for Canadian citizens and permanent residents not living in B.C. but owning properties in the province.

Royal LePage concluded the tax would spark a price dip in B.C.’s recreational housing sector after surveying 200 real estate advisors who specialize in such properties between May 15 and June 1.

About 55 per cent of B.C. respondents said they think the tax will “weaken momentum within the region and keep sales activity from reaching its true potential,” while 40 per cent thought it would impact prices.

Royal LePage chief executive Phil Soper said the tax has already weakened demand for B.C. vacation homes from Albertans, which he considers “the biggest buying cohort outside of the province.”

“You’d think with a strong economy and so much availability, you would see a stronger recreational property market in B.C., but it has been balanced by the recent regulations,” he said.

He and his company also predicted a 0.9 per cent dip in recreational home prices in Manitoba and a 7.5 per cent fall in prices in Atlantic Canada, bringing the average price in the region to $228,754.

Soper said he attributes Manitoba’s expected decrease to an increase in supply, but said he expects it to be a “short-term blip” because Winnipeg has been one of the most stable recreational markets over the last few years.

He said Atlantic Canada’s predicted drop stems from a lot of young graduates — a group that tends to buy homes more fervently — moving out of the province and a boom in people choosing to renovate instead of move.

The country as a whole was expected to fare much better, said Soper and Royal LePage, which is forecasting a 5.8 per cent increase in national recreational home prices. That would bring the average up to $467,764 from $442,239 previously.

Ontario and Alberta could also experience sharp spikes in recreational pricing.

Royal LePage said Ontario recreational home prices will average $535,885, up 10.4 per cent from last year, while Alberta’s will hit $770,100, a 8.9 per cent increase.

Alberta, said Soper, will benefit from an “exodus” of people looking away from B.C. for recreational properties and will see price increases because of improved employment opportunities and strong oil prices that drive activity in the market.

He said that Ontario’s recreational market will be driven by large numbers of people moving into the province and by an expected decrease in inventory levels and an increase in sales activity.

Plus, he said Gen Xers and retiring Baby Boomers, who are increasingly turning to recreational properties as “a reasonable alternative” to their current homes, will also spark a price hike in the market.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Houston woman gets two years for aggravated assault

Ewald pleads guilty; trial of co-accused Calvin Dyrland begins in Smithers court

Multi-family housing zoning passed

The way is partly paved for 11 new multi-family strata buildings to go up in Smithers

Residents shocked at Soldiers of Odin posters

Southside man claimed to be part of cell phone drive for Northern Society for Domestic Peace.

Two Smithers bowlers go to nationals

Madison Richter and Peyton Pettigrew are heading to Oshawa after winning gold at B.C. provincials.

New Work BC office scheduled to open April 1

Kopar Administration, the new Work BC contractor, still looking to fill positions in Smithers office

Sparks fly as SUV speeds down wrong side of Highway 1 trying to flee RCMP

Captured on video, the vehicle headed westbound against oncoming traffic before crashing

Bobrovsky perfect as Blue Jackets blank Canucks 5-0

Vancouver shut out for 10th time this season

Fundraising campaign launched for man caught in SilverStar avalanche

In only two days, the GoFundMe surpassed its $15,000 goal

Terror at sea: Helicopter rescues frightened cruise passengers in Norway

The Viking Sky cruise ship was carrying 1,300 passengers and crew when it experienced engine trouble

Search and rescue team helicopters injured climber from B.C. provincial park

A 30-year-old woman suffered a suspected lower-limb fracture in Skaha Bluffs Provincial Park

DOJ: Trump campaign did not co-ordinate with Russia in 2016

Attorney General William Barr said special counsel “does not exonerate” Trump of obstructing justice

Trudeau in Vancouver to support Tamara Taggart at Liberal nomination event

The former broadcaster is seeking the nomination for the Vancouver Kingsway riding

Trudeau calls May 6 byelection for B.C. riding of Nanaimo-Ladysmith

The riding opened up when Sheila Malcolmson resigned in January

B.C. VIEWS: The hijacking of our education system gathers speed

Children taught to strike and shout fringe far-left demands

Most Read