Kamloops Mayor Ken Christian says his city doesn’t have any issue being the odd man out.
The B.C. Interior city was the largest municipality left out of the BC NDP’s foreign-buyer and speculation taxes, and he thinks it will be good for business.
“We have a market advantage being left out,” he said. “Particularly when Kelowna is in, and we’re out, that’s even better because the opportunities for, particularly, Albertans going up to the Sun Peaks area, that’s where this could have been problematic. And if it becomes a problem for Sun Peaks, it becomes a problem for Kamloops.”
Sun Peaks ski resort is about an hour’s drive outside of Kamloops. It is the second-largest ski hill in the province after Whistler. On March 20, Kelowna city council voted to write a letter to the provincial government stating it is “fundamentally opposed” to the speculation tax, and demanding an exemption for the municipality.
Peter Milobar, MLA for Kamloops-North Thompson, said it was a good idea to exempt Kamloops from both taxes but added that changes to the policy have continued to sow confusion within the real estate industry.
“Some of these arbitrary boundaries are going to cause more problems than people realize,” said Milobar, a former mayor of Kamloops. “People don’t know if the boundary is going to unilaterally move, and I think there is still a lot of ambiguity … around certain things like condo rentals and other issues. There doesn’t seem to be a lot of certainty out there right now.”
Brendan Shaw, a real estate agent in Kamloops, said there is some concern the exemption from the two taxes could further affect Kamloops’ real estate supply issue, and he noted the average home price in the area is still low compared with both Kelowna and the Lower Mainland. According to Kamloops and District Real Estate Association (KDREA) statistics, the average price for a property sold in February 2018 was $376,217, up 6.7 per cent from February of last year, and the year-to-date average price rose 11.3 per cent from January to reach $378,951. The dollar value of all home sales in February 2018 was $73.7 million, rising 8.4 per cent from February 2017. This was a record for the month and only the second time that February sales have surpassed the $70 million mark. There were 314 new listings in February, down 5.4 per cent from February of last year, which was the lowest level of new listings for the month going back 14 years.
“Kamloops is kind of a beast of its own,” Shaw said. “Our average home prices are nowhere near where [Kelowna and the Lower Mainland] are at.”
Shaw added he thinks it was a good idea that Kamloops was left out of the two taxes, and noted the lack of new listings is hitting the area hard.
“I know the city right now is just being clogged with new permits, both on the single-family and multi-family side…. Yes, there is a shortage of supply and prices are increasing, but you look at 18 or 24 months out at the approved development permits, I think there is going to be quite an increase of supply that is going to catch up.”
KDREA president Doren Quinton said the city’s real estate outlook is still a buyer’s market. Quinton, who is also co-owner of Century 21 Desert Hills Realty, said he’s noticed more buyers coming up from the Lower Mainland over the past year.
“We still have very strong demand here,” he said. “I just looked at [a property] this morning, and there were 20 agents going through it in one day. So there’s a lot of people looking for the right house right now, and a lot of pent-up demand.”
Quinton added he has no issues with Kamloops being left out of both the foreign-buyer tax and the speculation tax.
In January and February, 355 properties were sold within Kamloops’ jurisdiction, an 8.9 per cent increase over the same period of 2017. Cyndi Crossley, a realtor with Royal Lepage Kamloops and former president of the KDREA, noted in a February release that the local market still has a low level of inventory.
“Even with stricter mortgage rules coming into effect, the story so far in 2018 has been the strongest sales in a decade and supply at seller’s market lows. As a result, upward pressure on prices will more than likely remain a feature of the market in 2018.”
