May brought encouraging news to the province's housing sector. Analysts say recovery signs in the real estate market in British Columbia were encouraging last month, even though year-over-year numbers remained down. The British Columbia Real Estate Association (BCREA) said 4,518 residential homes were sold in May, up from April's 3,284. Total sales dollar-wise grew from $2.4 billion to $3.3 billion.
Investors are always wary of circumstances that could adversely affect their investments. In times of global worry and economic crisis, real estate investors need to be mindful of safeguarding their portfolios to weather the storm. Business is not as usual in British Columbia in these times and even lenders have revisited their lending policies, which is affecting investors -- especially those with high margin investment methods such as student rentals, flipping, short term rentals and construction.
Investors aren't going to like the recent real estate market forecast. When assessing global risk for wealthy investors, British Columbia and the rest of the country was hit hard by yet another global risk agency: that real estate prices will continue to drop by double digits. Numbers are gathered around unemployment rates which will hit 14% -- or the adverse rate -- by the year's end.
A developer based in the Okanagan is offering investors the chance to get in on what it says is the best opportunity in the province. British Columbia real estate development company West K Homes, will be breaking ground shortly on 103 resort residences in Vernon. The president of the company says the 313-square-foot condo units are designed for trendy, compact living.
No industry is sheltered from a worldwide pandemic. The real estate industry in British Columbia has made the decision to stop all open houses given what is happening with a pandemic that is highly contagious. The British Columbia Real Estate Association (BCREA) is heeding the recommendations it has been given by local real estate boards across the province.
Much property in British Columbia continues to be unaffordable to many which is fuelling the crisis in the market. High prices are actually forcing some British Columbia residents to look outside the province when it comes to securing real estate and some analysts say this is having a negative effect on market balance overall. Inflated prices make it difficult for some -- like seniors, young families and single individuals -- to purchase real estate in the province.
Real estate numbers are up in the country thanks, in part, to the west coast. A recovery in the real estate market in British Columbia has increased overall numbers across the country. The Canadian Real Estate Association (CREA) statistics for November show a marked hike in property sales. CREA says most of the good news can be attributed to a rallying market after last year's dismal numbers.
Stricter rules are set to come into effect regarding the west coast speculation and vacancy tax. British Columbia is expected to raise the tax from 0.5% to 2% before the new year. The tax affects foreign owners of real estate, satellite families -- those who don't report the bulk of their income on Canadian tax returns. The provincial finance minister said the provincial tax was introduced on Dec. 31, 2018, to offset what was then considered to be a real estate crisis in British Columbia.
It seems that students who come to the country from abroad for their educations are having an impact on the housing situation. Many international students flock to British Columbia and the latest data regarding real estate deals shows their pull on the industry. Each student pays about $12,000 a year for housing with foreign student enrolment in the province skyrocketing 300% over the last decade.
With home prices the way they are, more and more sellers are having to get innovative to sell their properties. That is especially true when it comes to high-end real estate. A couple in British Columbia's Okanagan Valley got creative recently to sell their multi-million dollar home, which had been sitting on the market for some time.