Last Updated on October 24, 2023 by Ephraim Vecina
In a new forecast, brokerage giant Royal LePage stated that prices for recreational property (including second homes) in British Columbia will decline by 2.8% this year, down to $531,333.
Citing a new speculation tax as the main factor in this decrease, Royal LePage predicted that the tighter controls against outsized price growth will lead to more sell-offs, while at the same time discouraging other potential owners from buying – and might even prompt these would-be buyers to look elsewhere.
“While these policies were billed as a move to impede speculation and foreign investment, international purchasers make up a very small portion of the recreational market, and the dreaded ‘house flippers’ are an urban phenomenon,” Royal LePage president Phil Soper said in a statement last week, as quoted by Blomberg.
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The tax will penalize owners of non-primary residences by approximately 0.5% of the home’s value. In 2019, the levy will increase to 1% for non-B.C. residents and 2% for foreign nationals. The tax will cover several sections of Metro Vancouver and Abbotsford.
On a national basis, the recreational real estate market will experience 5.8% growth this year, up to an average of $467,764, Royal LePage predicted.
Ontario and Alberta are expected to lead the charge in this, with increases of 10.4% (up to $535,885) and 8.9% (up to $770,100), respectively. Market activity will mainly be fuelled by the relatively wealthy consumers in the 36 – 51 age range, as well as by equity-rich baby boomers approaching retirement.
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Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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