The Okanagan Mainline Real Estate Board has added its voice to concern over the province’s new speculation tax on property owned by out-of-province residents.
“While indicators suggest we are in a typical point in the market cycle, we have yet to see impacts arising from the B.C. government’s recent announcement of an impending array of residential property-related taxes,” said OMREB president Tanis Read in OMREB’s latest real estate statistics report.
“While we appreciate that the intent of these new taxes is to cool the B.C. housing market and curb perceived speculation, we are concerned about the unintended consequences that are likely to arise.”
Read pointed to the legions of non-B.C. residents, primarily Albertans, who own properties in Kelowna and West Kelowna who are now going to be potentially subject to a new speculation tax.
“This would force out-of-province owners to either contribute dramatically more to B.C. government coffers or rent out their homes to avoid the levy, effectively taking away the owner’s ability to use their own home.”
And she said it is also liable to have a detrimental effect on the Okanagan economy, not because of the intended changes to real estate prices, but due to the unintended loss of revenues generated by those homeowners who take advantage of local services such as car dealers, wineries, restaurants, gas stations and the resulting potential job losses.
“In the long run, I can’t see how curbing sales of recreational, student or non-primary housing options to people from provinces next door and beyond will address the Lower Mainland’s issues with housing affordability,” said Read, noting at this point, the speculation tax only affects properties in Kelowna and West Kelowna, and not elsewhere in the region served by OMREB.
She suggested that there is a need to address a generalized lack of supply of available housing.
“We have been lagging in housing supply for months and, when supply is limited, prices rise, housing becomes less affordable and fewer people have the opportunity to own their own home.”
Read contends the solution lies less in curbing demand through taxation and other measures and more in working with local governments to address factors that prevent the housing supply from keeping up with demand and affordability such as lengthy and uncertain approval timelines for building permits.
The OMREB report says across the region (from Revelstoke to Peachland) residential sales were up 12 per cent last month compared with January.
“The market typically picks up this time of year and this year is no exception despite recent new federal mortgage tightening rules and an interest rate increase,” said Read.
The average price of $509,545 is six per cent higher than at this time last year and within three per cent of January’s average price. Days on market (how long it takes to sell a home) averaged 89 in February, fewer than January’s 99, but consistent with last February’s 86 days.
New listings, at 912, were up 16 per cent higher than January, but comparable with last February’s 904.
OMREB serves three diverse markets within the region—the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke).
For detailed statistics specific to each of the three regions served by OMREB, visit omreb.com.