Real estate company Royal LePage foresees that the average price of a recreational home in (BC) will reach $531,333 by the end of September. This a 2.8% decrease from 2017’s average of $546,444, as reported by The Canadian Press.
This downward outlook stems from BC’s new speculation tax on out-of-province buyers. Under this regulation, property owners outside the province will be taxed 0.5% this year and will reach 2 % for foreign investors and 1% for Canadian citizens and permanent residents not living in B.C. but owning properties in the province in 2019.
According to Royal LePage Chief Executive Phil Soper, the effects of this tax alteration are already showing. First, it already weakened Albertans’ demand for BC vacation homes — a significant observation as Soper considers the particular market “the biggest buying cohort outside of the province.”
Further, Soper, along with his company, forecasted a .9% dip in recreational home prices in Manitoba due to an increase in supply. In Atlantic Canada, 7.5% drop in prices is also expected given a high number of young graduates who opt to buy homes moving out of the province, as well as a lot of people deciding to renovate instead of moving.
On the other hand, the country overall saw a 5.8% increase in national recreational home prices. This would bring the average price up to $467,764 from $442,239 previously.
Ontario’s recreational home prices will average $535,885, up 10.4% from last year, while Alberta’s will grow up to 8.9% amounting to $770,100. This will be pulled up by more people moving into the province, hence the hike in sales.
Lastly, Alberta may also see rosy revenues in the upcoming months. Apart from improved employment opportunities and strong oil prices, people who used to look at BC for potential recreational properties are now turning to Alberta for potential investment.