Yes it’s that time again! Scandals, rallies, speeches, voting, lies, truths, constant news coverage, and all the rest of what takes place during the run up to elections. It’s really a race with two horses, no offense to the Green Party, but we’re breaking down the recently announced platforms for The BC Liberals and NDP, and what that could mean for Real Estate in our city.
Now seems like a better time than any, to remind you all we are but humble REALTORS, and not Economists, political scientists or the various other professional roles that lie within the aforementioned sector. EVEN MORE importantly, we are not picking sides here, we are just breaking down each party's platform, and what they are saying about Real Estate.
So let’s start of with the opposition to the party in power - The BC Liberals
The BC liberals recently put forth their election platform. At a cost of $40+ Billion etc etc, but with some strategies in regards to Housing such as:
- Removing Speculation Tax, and implementing a Condo Flipping Tax on Capital Gains
- Increasing Foreign Buyers TAX
- No losing of Net Rental Properties with new developments
- Incentives for new housing construction
- Mandatory Community Plan reviews every 5 years
- Speed up permit approvals
- Introduce new home ownership possibilities (Co-operative ownership etc)
- Strata Insurance Management
Of course this is not everything they are discussing, just some key points (we don’t have time to discuss them all, plus each party has not discussed the full parameters of such, in details themselves yet.)
Immediately we see the Speculation TAX removal. That will be interesting. Official numbers say less than 1% of people are paying speculation TAX right now, so it doesn’t seem enough to make a real change in the real estate numbers. Naturally the Foreign Buyers TAX looks to be increased, so that could deter more from investing in our city. But, with Covid-19, we already saw foreign investment figures drop substantially, so would it keep the foreign investors out, or would we still see it increase slightly?
The overall promises with regards to community plans, redevelopment and permits etc are positive. I think most who are looking to redevelop right now would agree the process takes far too long (which inevitably costs more due to holding costs) and some zoning areas need to be updated to fit the latest requirements, that’s for sure *cough* RT Zones *cough*. This will actually encourage more development.
Moving on to The BC NDP:
The BC NDP have pretty much given, for the most part, a stay the course platform with some changes of course. Let’s take a look at some of the following:
- Rent Freezing until 2022
- Permanent capping of rental increases to inflation rates
- Building more affordable homes
- Controlling Strata Insurance
It’s no real surprise the NDP is not a pro-investor supporter, but then again that’s not their model. The freezing of rent until 2022 is a, somewhat, big call. We personally don’t believe the actual dollar amount will be the issue, more so the flexibility, or now lack of it, will have a deterring effect on potential investors. The same with the rent capping to inflation topic. As to how the NDP will assist with Strata Insurance is yet to be seen, so only time will tell there. They party has come under some pretty heated flack recently for their purchase of buildings in predominantly higher end areas (Yaletown, Point Grey) to house the homeless. It’s not the housing of the homeless, but the cost in which these buildings have been purchased for, versus the minimal amount of homeless they can house. The most recent purchase in Yaletown costing $55M, and only having 110 rooms to house the homeless. The question can be asked, if the purchases in future are carried out in more affordable areas and can house more, could the party avoid this heat and still come through on their promise? It seems likely.
Both parties have some opposite argumentsn BC Liberals want to you provincial and municipal land to house the homeless, the NDP would like to purchase in higher end neighborhoods to do so. BC Liberals would change STRATA insurance to reflect costs of actual claims, as opposed to mandatory insurance on Full Replacement.
As well the the above, there are other various changes that could have an impact, but are not specifically targeted to Real Estate - Removal of PST, Rebates for families etc. However these could be a side, side effect and not directly linked to the housing debte, so we’ve left them out of the reading for now.
As the weeks move on, we’re sure to hear more of the above from each party and their promises. As always with politics though, we won’t know how this will actually play out until it’s done.