A new poll has found that most B.C. residents believe new taxation is making housing affordability worse. Residential real estate in the Lower Mainland has suffered nearly $90 billion in losses to home equity in the past year which will have major impacts on the B.C. economy. Home sales across the province will remain slow through the rest of 2019 with a slight recovery in 2020. In a recent unanimous decision, the B.C. Court of Appeal found that the B.C. government’s proposed legislation affecting the Trans Mountain pipeline expansion is in conflict with the federal jurisdiction over interprovincial pipelines.
IN THE NEWS
A new poll carried out by Ipsos on behalf of the Urban Development Institute and published on June 3, 2019, found 74 percent of B.C. residents believe additional taxes, fees and regulatory red tape have made residential real estate increasingly unaffordable. According to the poll, there is significant support for diversity of housing options within single-family neighbourhoods. Additionally, the poll indicated that residents do not believe governments are doing enough to encourage rental home construction. The process for gaining approval and obtaining permits to construct rental developments can take as long as eight years indicating that “the approval process is broken” 1.
A study released May 21, 2019 found that the value of residential real estate in the Lower Mainland has decreased by the amount of $89.2 billion in the past year. The study was carried out by Paul Sullivan, a senior partner at a commercial real estate and property tax appraisal firm, on behalf of a group that advocates for the end of unfair and politically motivated taxation policies. According to Sullivan, the government’s attempt to deal with affordability issues has resulted in the loss of billions of dollars from the B.C. economy. These losses are predicted to have devastating impacts on the job market as well as people relying on the equity in their homes for retirement 2.
According to deputy chief economist, Bryan Yu, B.C. will experience a decline of nearly 11 percent in home sales in 2019, in contrast to the rest of the country where sales have stabilized. Prices are expected to recover to approximately 8.8 percent in 2020 to just below 2018 levels. Yu’s report states that the knock off effects of the Metro Vancouver slowdown in the market has resulted in few recreational and retirement homes purchased in other markets. Additionally, the sluggishness in Alberta’s economy has likely slowed recreational sales in the interior of B.C. Yu states that the decrease in the market is not driven by economic factors as the major factors behind the downturn are government policies such as the B20 mortgage stress test and provincial taxation 3.
In a recent decision, the B.C. Court of Appeal found that the B.C. government’s proposed amendments to the B.C. Environmental Management Act were in conflict with the federal jurisdiction over interprovincial pipelines. In a 66 page ruling written by Justice Mary Newbury, the Court found that the amendments would single out the Trans Mountain pipeline expansion and usurp the National Energy Board’s role in approving projects of national interest. Justice Newbury wrote that although both the provincial and federal governments should play important roles in the management of the environment, under the Constitution Act, the federal government has jurisdiction over interprovincial pipelines 4.
BC UNEMPLOYMENT RATES
||Rate from May 2019 to June 2019
||Rate from April 2019 to May 2019
Table source: http://srv129.services.gc.ca/ei_regions/eng/rates_cur.aspx
REAL ESTATE ACTIVITY (RESIDENTIAL) BY REGION
Greater Vancouver 5
- Units sold: 6.9% decrease from May 2018
- Active listings: 30% increase from May 2018
- New listings: 8.1% decrease from May 2018
- Benchmark price: $1,006,400.00 (78.9% decrease from May 2018)*
- Units sold: 12.3% increase from May 2018
- Active listings: 26.1% increase from May 2018
- Benchmark price: $860,800.00 (2.9% decrease from May, 2018 for detached homes)*
- Units sold: 13.7% decrease from May 2018
- Active listings: 26.3% increase from May 2018
- New listings: 10.7% decrease from May 2018
- Benchmark price: $964,200.00 (5.9% decrease from May, 2018 for detached homes)*
- Units sold: 6.37% decrease from May 2018
- Active listings: 14.43% increase from May 2018
- New listings: 1.77% decrease from May 2018
- Average residential price: $573,926.00 (1.52% decrease from May, 2018)
- Units sold: 9.5% decrease from May 2018
- Active listings: 7.2% increase May 2018
- New listings: 4.4% decrease from May 2018
- Average residential price: $313,798.00 (4.7% increase from May, 2018)
*Benchmark based on the MLS HPI® benchmark for single family detached homes.