The federal ban on foreign purchases of Canadian homes is now in effect. The intent of the regulation is to free up housing to meet the intense demand that has seen real estate prices skyrocket over the past decade. However, just how effective the rule will be remains to be seen as foreign buyers account for less than 0.5% of real estate sales in BC.
The prohibition isn't permanent. It's set to run for two years and does not apply to non-Canadians who are looking to rent. The Act defines residential property as buildings with fewer than four homes, as well as parts of buildings like a semi-detached house or a condominium unit. The law does not prohibit the purchase of larger buildings with multiple units.
Anyone convicted of violating the Act faces a $10,000 fine, and non-Canadians could face a court order to sell the house.
As property assessments arrive in BC mailboxes, people in Greater Victoria can expect a mixed message about the value of their properties.
“Homeowners across Vancouver Island can generally expect about 10% to 20% rise in assessment values with a few exceptions," BC Assessment's Vancouver Island Deputy Assessor Jodie MacLennan said in a news release. “While the current real estate market has been trending downwards, it is important to consider that 2023 assessments are based on what your home could have sold for as of July 1, 2022, when the market was performing higher."
The increase in property values is reflected in an increase to the threshold for the Home Owner Grant, which is now available for properties worth up to $2.125 million. The grant amount has not changed, however.
An increase in your BC Assessment does not directly result in an increase to your property taxes. If your property increased by the average rate or less for your municipality, your taxes could decrease.
Could this be the end of interest rate increases? The Bank of Canada increased its rate today to 4¼%, but softened the language it uses around future increases.
A statement from the bank said the bottlenecks that had been affecting global supply chains are loosening.
The Consumer Price Index was at 6.9% in October, though core inflation was 5% — much closer to the bank's target of 2%.
"Three-month rates of change in core inflation have come down, an early indicator that price pressures may be losing momentum," the bank stated. "However, inflation is still too high. The longer consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched."
Make sure to consult with your preferred financial and mortgage advisors —The Chamber's Member Directory is a great place to find experts who can help you make your business thrive.
Greater Victoria continues to have one of the tightest labour markets in Canada. The latest numbers from November show our unemployment rate is back to 3.5%, according to Statistics Canada. That's down from 4.3% in October and closer to where the region typically was before the pandemic.
"We know there is work in our region and that makes us attractive to ambitious people who want to move here and build their careers," Chamber CEO Bruce Williams said. "Our regional economy benefits from having the stability of BC government jobs as well as CFB Esquimalt. However, we still need to address housing supply in Greater Victoria to make sure we can retain people who want to work here and contribute to our community."
There is some good news on that front as new construction jobs appear to be driving the lower rate. There were 18,400 people employed in construction this November compared to 13,500 in November 2021.
Businesses that service the real estate industry are a major contributor to Greater Victoria's economy. However, rising interest rates have slowed sales. Throw in the traditional quiet period around the holidays and fewer properties are changing hands. Only 384 sales were recorded in the region for November, down from 653 last November.
There are also concerns about potential unintended consequences of recent changes to the provincial Strata Property Act.
"It is an open question whether these changes will bring any additional rental stock to the market — with BC's complex Residential Tenancy Act not all homeowners of vacant strata homes have a desire to become landlords and current interest rates are less attractive to investors who may want to purchase strata rental properties," Victoria Real Estate Board President President Dinnie-Smyth said in a news release. "It is also possible that these measures will contribute further to eroding housing affordability as older stratas with rental restrictions were generally valued lower than their rentable counterparts."
Slower sales have also contributed to a slight dip in market values over the last few months. That could mean some property assessments — being sent out soon to homeowners from BC Assessment — will be higher than current market value.
“I want to emphasize that assessments are based on July 1 values of this year, meaning that when similar properties were sold up to and around July 1, those market value sales are used to calculate your assessed value," Assessor Bryan Mura said in a news release. “An increase in assessment value does not, however, necessarily result in an increase in property taxes. Taxes are typically only affected if you are above the average value change for your community."
BC Premier David Eby hasn't wasted any time putting his stamp on the provincial government. In less than two weeks, the province has rolled out a series of almost daily announcements that take aim at some of the top concerns facing British Columbians.
Among the barrage of news releases was a promise to add $230 million to RCMP funding to increase staff and a plan to train more doctors. Those, along with announcements of a new Housing Ministry and a strategy for making communities safer, are welcome news. The Chamber will continue to advocate for business as these announcements move from the idea stage to implementation.
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Access to affordable housing is key to ensuring Greater Victoria employers are able to find and keep workers. Yesterday, the province announced a new ministry would be created to focus solely on housing and, on Monday, BC Premier David Eby unveiled three actions aimed at quickly getting more homes built.
"The Chamber has long been vocal about the need to streamline processes and invest in programs that increase housing supply," Chamber CEO Bruce Williams said. "We're happy our new Premier is listening, and we look forward to working with the province to connect the businesses and people who make housing happen with the policy makers who need to support them."
The new Minister of Housing will be named on Dec. 7, when Premier Eby shuffles cabinet. The action plan will see strata rules changed to reduce vacancies and end restrictions against young families. As well, the province will monitor municipalities and step in if local governments are unable to get homes built.
“Housing affordability and availability are among the biggest problems people in Saanich and across the province are facing," District of Saanich Mayor Dean Murdock said in the news release. "We all need to work together to address this issue and deliver the homes people need for sustainable and thriving communities. I’m glad the Province is taking these steps to help ensure municipalities build the housing people in their communities need.”
A pair of announcements over the last week offered good news for efforts to find and keep workers in Greater Victoria. On Nov. 16, the federal government listed changes to the types of jobs considered high demand. Sectors such as health care, construction and transportation will benefit from having 16 new occupations included under the Express Entry system.
Meanwhile, BC announced today a plan to encourage more skilled immigrants to settle outside of the Lower Mainland. That should help regions such as Greater Victoria. The incentives give candidates in the Provincial Nomination Program a higher priority if they have worked outside of Metro Vancouver. The same priority will be given to recent grads of post-secondary schools outside of the Lower Mainland.
No surprises here, but our region is once again earning praise as a great place to visit and build a life.
This time, the City of Victoria gets the credit as Best Small City in Canada, according to Resonance Consulting. The international firm ranked six categories: place, product, programming, people, prosperity and promotion to determine the top 25 small cities in Canada.
Victoria placed on top for access to post-secondary education and bike lanes (product) as well as for its restaurant scene and activities (programming). The rank is well deserved, of course, though locals know that the city couldn't do it without all of the neighbouring municipalities that make up Greater Victoria. The list did include the District of Saanich, which placed No. 23. Saanich's only real knock seems that it is lesser known then the official capital!
Hopefully being featured in lists such as this will help more people choose to join our community and contribute to our workforce and economy.
Housing remains a drag on the vitality of our region, though overall quality of life in Greater Victoria has improved.
According to the 2022 Vital Signs Report, released this week, Greater Victoria's grade has moved up from a B grade last year to a B+ this year.
Housing earned an F grade this year, a significant drop from a D+ last year.
"Vital Signs is a great check up on our region's economy, and The Chamber was happy to contribute as a community partner this year," Chamber CEO Bruce Williams said. "The grades are a good way to illustrate concepts that contribute to our overall quality of life."
It's the 19th edition of the annual report, which uses surveys as well as stories and graphics to provide snapshots of the past year.
This year's theme asked What Does Community Mean To You? Respondents rated the natural environment and climate as the best things about Greater Victoria. The aforementioned Housing crisis and cost of living were the two most important issues, according to the survey.
The report looks at 12 areas, with grades ranging from a B-plus for Learning and Sports and Recreation, to an F for Housing and a C- for Health and Wellness.
A plan to increase the number of people immigrating to Canada is a step in the right direction. Employers are facing a challenging labour market as demographic forecasts show a growing number of job vacancies in the years ahead. The federal government's new plan, announced Tuesday, will see immigration increase by almost 1.5 million over the next three years.
"I think employers in Greater Victoria still want to see details about how the Express Entry system will work to ensure newcomers have the skills needed to fill open positions," Chamber CEO Bruce Williams said. "There are also questions around how the Provincial Nominee Program might help settle new Canadians in Greater Victoria."
The Chamber has worked with our national network to call for better recognition of credentials so that people who choose to live in Canada are able to continue careers they've trained for. We all benefit from the addition of skilled professionals who can make immediate contributions to our economy.
Immigration event for employers
Immigration, Refugees and Citizenship Canada is offering a virtual learning series to help employers learn more about Canada’s economic immigration programs. There are four sessions and you can attend as many as you want. Topics include an overview of outreach services for employers, the benefits of hiring global talent and an introduction to work permits.
It will be easier for fans of the world's game to gather together, regardless of the time their favourite nations are kicking off on the other side of the planet. The province announced temporary expanded hours for businesses in BC's hospitality sector. The move won't affect liquor sales and service, but bars, pubs and restaurants will be able to serve non-alcoholic beverages during the extended hours.
The FIFA 2022 World Cup in Qatar begins Nov. 20 and runs until Dec. 19.
Canada makes its first appearance in the global competition since 1986 with a game against Belgium on Nov. 23.
Access to primary health care is an important element of safe communities. The Chamber applauds news that the provincial government is taking serious steps to retain existing family doctors and attract new ones to the province.
A new payment model will be available for family doctors starting in February. The deal will change how patients interact with their doctors, allowing for more focused visits. The current model has been criticized for emphasizing the number of patients seen per day rather than the quality of the visit.
The Chamber applauds news that the federal government will allow international students to work more than their current limit of 20 hours.
Having access to a larger workforce will help us better achieve our economic potential. Allowing students to earn more money without interfering in their studies will also improve the economic situation of new graduates. Canada also relies on immigration to meet employment forecasts, and having people who have studied and worked here will only help with the adjustment to Canadian society.
The pilot project begins Nov. 15 and is scheduled to run until the end of 2023, though there are already calls to make the extended hours permanent.
Last week's news that the provincial government is making child care more affordable is a step in the right direction. The Chamber has long advocated for accessible and affordable child care as a vital investment in our economy.
On Friday, the province announced that parents can expect to save as much as $550 in child care costs every month. The new funding will go directly to licensed child care centres so parents don't have to apply. The savings will take effect in December, and help families with children who are kindergarten-aged or younger.
The savings build on earlier cuts to costs and are funded by the federal governments $3.2 billion agreement with BC.
Examples of how the program will help families and allow more parents to continue their careers include:
The latest numbers show inflation has cooled faster than expected. The August Consumer Price Index was up 7% over last year — less than the 7.3% that had been forecast. Core inflation was also lower than expected.
The drop in inflation comes after the Bank of Canada raised interest rates. However, it will take more than numbers to stem inflation and get Canada's economy back on track, said the bank's Deputy Governor Paul Beaudry.
"Some have suggested that policy-makers need to engineer a substantial slowdown — or even a recession — to get inflation back under control," Beaudry said in a speech on Tuesday. "But the best strategy for responding to high inflation needs to consider how people form their inflation expectations. If people understand and believe that the central bank will eventually bring inflation back to target, their expectations will remain 'anchored.'”
Businesses and employers can help by moderating increases to prices or wages, with the understanding that inflationary pressures are temporary. Not an easy task for organizations facing increasing costs and still recovering from pandemic challenges.
As we mark the start of fall, tourism and hospitality businesses can look back on a successful summer.
A return of customers kept many restaurants operating at capacity, though they did face other constraints. A lack of staff and a public sector strike that made stocking liquor a challenge cast a shadow on a season that many businesses rely on to make it through slower seasons.
Ian Tostenson, president and CEO of the BC Restaurant & Food Services Association told CHEK News that many Victoria restaurants operated with 80% of their staff.
The accommodation sector also enjoyed strong season. The latest Victoria Tourism Bulletin from Chemistry Consulting reports that occupancy rates in July were up from 2021 and close to 2018 levels. The average rate for a room was $305 in July, up from $230 in July 2021 and $250 in July 2019.
BC Ferries also reported a return to pre-pandemic levels in vehicles, though there were fewer passengers and buses onboard in July.
The Victoria International Airport welcomed 162,000 passengers, which is getting closer to the 185,000 in July 2019. And the Victoria Conference Centre saw a big increase this year with 8,211 delegate days in July compared to 3,633 in July 2019.
A plan to make it easier to replace single family homes with multi-unit housing within the City of Victoria is heading into its third debate on Thursday.
The Missing Middle-Housing Initiative is a proposal to make the construction of new homes faster. The plan has been working its way through the municipality's channels since 2019 and went to public hearing this August. However, the outpouring of public commentary was more than could be addressed in the initial hearing. Additional time was required last week but was still not enough to conclude the hearing, which will continue tomorrow at 10 am (Thursday, Sept. 8).
Information on how to participate, including a link to a livestream, can be found here.
A plan to level up Greater Victoria's film industry received a boost last week. The provincial government's BC Bid website posted a Request for Pre-Qualification for a film studio at Camosun College's Interurban campus.
“The process is intended to result in an innovative proposal that benefits the college, students and the local economy,” Camosun College President Geoff Wilmshurst said in a news release.
The request could lead to a respondent being pre-qualified to design, build and fund a film and digital media education centre in exchange for a 99-year lease. The deadline to submit is Sept. 30, with next steps dependent on the numbers of responses received. The size and construction timeline will be part of a future step in the process.
Greater Victoria's housing market continues to become more balanced. The ratio of sales to active listings is at 28.14%. Real estate professionals consider a balanced market to be between 20% and 15%, Victoria Real Estate Board president Karen Dinnie-Smyth said.
“A high percentage means more of the available listings have sold, which shows a high buyer demand and that’s generally a favourable market for sellers," Dinnie-Smyth said.
The benchmark value of a single family home in Greater Victoria's core was $1.39 million. That's down from $1.43 million in July, but up from $1.2 million last August.
Access to a family doctor is one of the keys to ensuring safe communities, which are fundamental to good business.
With an ongoing shortage of primary care providers in BC, there are serious concerns about what can be done to encourage more doctors to commit to serving BC communities.
To try and stabilize the situation, the province announced today that it is providing $118 million through a partnership with Doctors of BC. The funds will be used over four months, starting Oct. 1, to support operational costs for family doctors and medical clinics.
About 3,480 family doctors who have their own practices and 1,100 family doctors working in walk-in clinics are expected to receive funding. That represents more than 70% of family doctors working in the province.
Housing supply is critical in order to address the highest expense directly affecting the cost of living in our region and across Canada. With demand growing due to increases to our population, the challenge of our time is to ensure homes are accessible and affordable for everyone needed to help our community prosper.
"It's fundamental economics. A limited supply results in increased demand, which tends to increase costs," Chamber CEO Bruce Williams said. "We need a concerted effort from all levels of government to support builders who need an adequate workforce as well as access to materials and land needed to build more homes."
Some progress is being made. Canada Mortgage and Housing Corp. recently reported that urban housing starts increased in July compared to June.
“Historically elevated levels of housing starts activity continue in Canada, which have been well above 200,000 units since 2020,” said Aled Ab Iorwerth, CMHC's Deputy Chief Economist.
Greater Victoria's film industry continues to create economic opportunities on southern Vancouver Island. Netflix recently updated a website that provides details on their local productions. The site, Netflix in your Neighbourhood, shows filming locations of recent series such as Rescued by Ruby, Super PupZ and others.
“We had three features and 13 television movies come through last year — that’s amazing,” Vancouver Island South Film and Media commissioner Kathleen Gilbert told CHEK News. The industry was responsible for direct spending of about $55 million per year over the pandemic.
The Chamber continues to work with community partners on several projects looking to build production studios in Greater Victoria.
The pace of Greater Victoria's housing market is returning to a "calmer and more friendly environment" said the president of the Victoria Real Estate Board.
Rising interest rates have effectively slowed sales and allowed supply to return to more typical levels. In July, 510 properties were sold, which is down 16.7% from June and 38.9% from July 2021.
"The government's recent focus has been on demand-side mechanisms and other market modifiers such as a mandatory three-day cooling off period to start in 2023," VREB President Karen Dinnie-Smyth said in a news release. "A better long-term approach to housing affordability for our future is to address housing supply constraints which will be central to the next round of upward pressure on home prices."
The fastest-growing region in Greater Victoria is getting a new post-secondary campus. The province announced today it was contributing $77 million toward the $98 million project that will see Royal Roads University, the University of Victoria, and Camosun College join forces as part of a group of educational providers at the campus.
Located in the City of Langford, the five-storey mass timber building will make it easier for students from the West Shore to attain a post-secondary education. The facility is expected to open in 2024 with 600 students, and expand to 1,300 students by 2036.