As the Bank of Canada aggressively raised rates over the past year to fight multi-decade-high inflation, fears are mounting that tighter monetary policy will push the Canadian economy into recession. Indeed, central banks have a poor historical track record in achieving “soft landings” following tightening cycles. That is, amid high inflation, central banks often struggle to “thread the needle” of raising rates enough to bring inflation back down to 2 per cent without tipping the economy into a recession.
In this Market Intelligence, we summarize how past Canadian recessions have impacted the BC economy and housing market and look forward to how the BC housing market may perform during a potential 2023 recession.
Summary Findings High interest rates mean that recession anxiety is mounting: – Historically, home sales tend to lead the business cycle, starting to decline many months before the start of a recession. – – By the time the recession begins, sales are typically near their nadir. – Prices follow a less predictable pattern surrounding recessions. The early 1980s involved a large run up and crash in prices, but subsequent recessions involved a modest softening or plateauing of prices before the ascent resumed. Historically, home sales tend to post substantial recoveries following a recession as interest rates are cut to support the economy. – Strong economic fundamentals and demographics support the housing sector in British Columbia.
To view the latest Market Intelligence report PDF, click here.
Market Intelligence is published by the British Columbia Real Estate Association. Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.
Additional economics information is available here on BCREA’s website.
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On January 1st, 2023 the Canadian Government is implementing a ban on foreign home buyers. Canadian citizens and permanent residents are exempt from the ban while other buyers have different rules based on their situation.
International students and foreign workers are permitted to purchase a property in Canada but they have restrictions they have to satisfy before being able to purchase. They are only permitted to purchase one property. For foreign workers they must have worked in Canada for three of the four years before buying a property. Students are required to be in Canada for 244 days each year for five years before buying and are not permitted to purchase anything over $500,000.
The intention of these restictions to to establish that the international students or foreign workers have an intention to become a permanent resident.
The non-citizens who can purchase a property in Canada without further restricions are: refugees, diplomats, foreign nationals with temporary resident status, consular staff and members of international organizintions living in Canada.
Non-Canadian entities and foreign controlled Canadian entities will be banned from buying property in Canada. This includes a non-Canadian who has a three per cent direct or indirect ownership interest in an entity or corporation.
The ban also doesn’t include properties in less populated areas and often this includes areas where recreational properties exist. The Kamloops area is subject to this legislation however a lot of the outlying areas are not included, such as the Shuswap Lakes region, North Thompson, South Okanagan (including Penticton & Kootenays). Here is a map showing the Census map showing the exempt areas.
These rules are also developed to target residential properties with three or less units. So any properties with four or more living quarters are not part of the exemption for foreign purchases. Properties that are part of the ban are detached homes that contain a private kitchen facility, private bath and private living area and a part of a building that is intended to be owned and used as a place of residence. This includes semi-detached homes, townhouses, condos and row houses.
The ban may not do much to calm prices in Canada, we saw such a huge influx of buyers into the market due to low interest rates and a low supply of homes to purchase. The number of foreign buyers in BC specifically is quite low. In 2020 the number of residential properties where one or more owners were a non-resident was 4.7%. In 2021 that dropped to 1.1%.
The ban on foreign buyers is for two years. If any person or entity that knowingly assists a non-Canadian in the purchase of a property they can be fined up to $10,000 and the property may be forced to be sold.
Buyers are investing in Kamloops residential properties as rentals. This has been going on for many years. The BC Government recently changed the rules for strata properties in BC. They removed the age and rental restrictions from the bylaws by changing the Strata Property Act.
In Kamloops we have a number of very desirable strata developments that investors often want to consider as a purchase. These properties have always been off limits to those buyers due to the rental restrictions in place. With the recent changes to the Strata Property Act this allows investors to consider nearly all strata developments in the Kamloops area. There are a lot of great properties that would make great investments and homes for tenants. We have a very low inventory of rentals in many areas of Kamloops so hopefully this will open up more options for those renters looking for a place to call home.
Below is a list of several strata developments in Kamloops that previously had a rental restriction and are seen as a great place to invest due to their price point. Keep in mind that this does not apply to those properties that are age restricted to 55+ and this also doesn’t open properties up to short term rentals such as Air BnB or VRBO.
South Shore Strata Development Properties with Previous Rental Restrictions
Aberdeen
411 Aberdeen Drive: Forest Hills. This complex consists of split-level walk up designed homes which back on to a green belt and two storey style homes. They range in size from just over 1,300 square feet to around 2,100 square feet. The complex was built in 2006/2007.
1970 Braeview Drive: Braeview Place. This complex was built between 2005-2008. They are nicely oriented walk-up style homes with single or double garages. These homes makes great rentals as they are very efficient living with no yard maintenance at all. Located minutes to Aberdeen Mall and transportation.
1990 Pacific Way: Pacific Ridge. This strata development sits alongside Pacific Way just minutes from the main Aberdeen/Dufferin shopping district. The units range in size from around 1,000 square feet to over 2,000. The strata is divided into two sections, the older section built in the mid 1990’s and the newer section built around 2008.
1155 Hugh Allan Drive: Glendevon. Built in the 1980’s these townhomes have nice architectural features in their layouts. They all have a carport for covered parking and are centrally located to transportation and shopping.
1160 & 1170 Hugh Allan: Highland Vistas. This condo development has nice units that are often two bedrooms and one bathroom. They are not huge units making them great for rental properties due to the size. They are located close to transportation making it easy for students or seniors to get around.
1120 Hugh Allan: Highland Ridge. The majority of the units in this condo development have sweeping views of the city of Kamloops and the North and South Thompson Rivers. These units range in size from one bedroom units to larger two bedroom, two bathroom condos.
To view all homes for sale in Aberdeen click here.
Sahali
1570 Freshfield Drive: Summit Gardens. Located across the street from 1605 Summit Drive this strata development was built in the mid 1970’s however the units are larger than the Summit Drive units. The development has had a number of upgrades to the outside and a lot of owners have updated the inside of units.
1750 McKinley Court: McKinley Gardens. This strata townhouse development, built in the early 1990’s is nearly identical to the one located at 1775 McKinley Court. The units are a nice size, often over 1,500 square feet and all include a single car garage. There is a two-storey layout and level entry rancher layout in this development.
481 Monarch Court: Monarch Villas. Built in the late 1990’s Monarch Villas are nestled close to an elementary school, trails, and transportation. They are similar in size to the McKinley units but are just a bit newer.
1469 Springhill Drive: Springhill Gardens. These units were built in the early 1970’s and are very close to the Springhill/Summit intersection allowing for easy access to transportation and shopping. These townhomes all include covered parking and a bonus inground pool for those summer months.
1810 Springhill Drive: Gleneagles Manor. These units built in the early 1980’s have had a number of upgrades over the past few years (2020’s). Most units are the walk-up style however there are a few two-storey styled units. They are steps from the public bus stop and not far from city amenities.
1605 Summit Drive: Riverview Village. This strata development was built in the mid 1970’s. The units tend to be a bit smaller than those on Springhill, McKinley and Freshfield however they are often 2-3 bedrooms and are even 4-bedrooms in some cases. Located steps from the public bus stop and walking distance to TRU and shopping.
629 Lansdowne Street: Riviera Gardens. Located across the street from Lansdowne Village and the public bus loop this condo development is in a great location for those that want quick access to downtown amenities. The units range in size from a one to two bedroom unit. They all have secure parking.
900/950/970 Lorne Street: Park Place. This sought-after strata condo and townhouse development is one of the few in Kamloops with a number of amenities such as an indoor pool and hot tub, fitness room, meeting room/party room, sauna, dock on the river, workshop and more. The gardens are often very beautiful at Park Place and each unit has at least one underground parking stall.
683 Victoria Street: Monarch Place. This condo development is located close to downtown amenities with the majority of downtown shopping and transportation within a block or two of the development. The units have secure parking, and they are all above commercial space making them secure.
To view all homes for sale in South Kamloops Downtown click here.
Valleyview
1980 Glenwood: Glenwood Gardens. Located across the street from the newly renovated and built Valleyview Secondary School and minutes to the local elementary school. This development is great for families. It includes covered carport parking and an outdoor pool.
To view all homes for sale in Valleyview click here.
North Shore/North Side of Kamloops
Brocklehurst (Brock)
1697 Greenfield Ave: Glenwood Townhouses. These homes are located in a quiet Brock neighborhood and feature a smaller footprint with fenced yards and carports. Each unit is just over 1,000 square feet and are two and three bedrooms.
800 Southill Drive: Southill Gardens. The units in this development range from two bedrooms to four bedrooms. Each unit has 3 levels of living space. They all have small yards and a single carport. They are located steps to transportation and the Brock Shopping Center.
800 Valhalla Drive: Valhalla Place. These townhome units are known for their nice sized square footage and fenced yards. They offer good space for those who reside in them. Located steps to transportation and an elementary school. They are also walking distance to the North Shore shopping district.
249 Kitchener Cres: Shoreline Place. This strata development is located beside the Rivers Trail and beach volleyball courts. There is easy access to the river year-round, steps to transportation and minutes to downtown Kamloops. This strata complex also includes an outdoor inground pool.
To view all homes for sale in North Kamloops North Shore click here.
There are a number of other properties throughout Kamloops that are suitable for an investor or buyer. A lot of these properties did not have rental restriction in place before the BC Strata Property Act amendment.
There are a lot of investors and buyers looking to purchase in around Thompson Rivers University (TRU). There are some great options in that area that range in age, size and location.
If you would like more information about all of the properties for sale contact us.
To search for Kamloops properties for sale click here.
Vancouver, BC – December 13, 2022. The British Columbia Real Estate Association (BCREA) reports that a total of 4,512 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November 2022, a decrease of 50.8 per cent from November 2021 and about 30 per cent below a historical average November. The average MLS® residential price in BC was $906,785 an 8.6 per cent decrease from $992,245 recorded in November 2021. Total sales dollar volume was $4.1 billion, a 55 per cent decline from the same time last year.
“A lot has changed in 2022,” said Brendon Ogmundson, Chief Economist. “This time last year, home sales were near a record for November, home prices were accelerating, and mortgage rates were less than half of current levels. Elevated mortgage rates will continue to constrain sales activity, though with the Bank of Canada nearing the end of its tightening cycle and benchmark bond yields falling, mortgage rate relief may be on the horizon.”
Year-to-date, BC residential sales dollar volume was down 28.7 per cent from the same period in 2021 to $77.4 billion. Residential unit sales were down 34.4 per cent to 77,376 units, while the average MLS® residential price was up 8.6 per cent to $1 million.
Click here to visit to BCREA’s website. To view other statistics for the Kamloops and BC real estate market click here.
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