Real estate in qathet & beyond: What has changed since March of 2020?

BY PIETA WOOLLEY

Although prices were rising steadily before the COVID-19 pandemic began, they exploded during the height of the pandemic.

In February of 2020– just before the restrictions were first announced – the median price for a single family residential home in qathet was $348,750.

A year later, they were just $395,000.

But by February 2022, they were at$560,000, shooting up to $721,000three months later, before cooling off.

By December of 2022, prices were back down to $440,000– still $100,000higher than before the pandemic.

From May 2010 to March 2020, the Bank of Canada interest rate has varied from a low of 0.5% to a high of 1.75%. At the beginning of the pandemic, interest rates dropped to a historic low of 0.25%–where it stayed for two years, and when record numbers of Canadians bought homes.

But on March 1, 2022, the Bank of Canada began raising rates with each meeting. Over the course of the next 11 months, interest rates soared from 0.5 to 4.5%. The Bank meets again on March 7

Starting January of 2023, BC became the first jurisdiction in Canada to introduce a mandatory three-day gap between when a deal is made, and when it is finalized. The cooling-off period allows all buyers time to arrange for financing and get the home inspected – two crucial protections. In a hot market, those conditions often got dropped as buyers were desperate to secure homes.

If a buyer backs out after those three days, they owe the seller $250 for every $100,000 of a home’s value – so $1,250 on a $500,000 home, according to the legislation.

Also on January 1, Ottawa introduced this tax credit (up to $15% of $50,000,or $7,500) for renovations to an existing home that will accommodate family members. That could be a suite, a carriage home, or other build.

It must include its own entrance, kitchen and bathroom to qualify.

Multigenerational homes are the fastest-growing family type in Canada, with more than 1 million people living in homes with three or more generations under the same roof. Here in qathet, just 205 households are multigenerational, representing just 2.5% of the population.

Although $7,500 won’t go far in this construction economy, it is a potential write off on your 2023 taxes if you choose.

This Federal rule came into effect on January 1 of 2023, the latest effort to cool housing prices. Previously, several municipalities in BC were already part of a Foreign Buyers Tax program, which forced non-citizens buying hereto pay an additional 20% of the price of the home they were buying into a provincial housing fund. qathet is not one of them (although Parksville, Lanzville, Qualicum Beach and Nanaimo are.)

Here in qathet, just one non-Canadian citizen bought a residential property in 2022, so this rule will likely have little effect here.