As the big-city commentariat posits on how the 15-per-cent surtax on foreigners buying property in Metro Vancouver would affect other markets, residents of Hope also are wondering how the town might, or might not, get affected.
The Hope Standard reached out to Mayor Wilfried Vicktor, AdvantageHOPE executive director and commercial real estate agent Tammy Shields and Chamber of Commerce president Stephen Yeung for comment.
All three have slightly divergent views, but all agree that Hope will see a hotter real estate market.
There are two theories of how the 15 per cent tax would affect Metro Vancouver. The first theory states that the tax would drive money elsewhere. The other theory argues that cash would flow unabated into Metro Vancouver.
Yeung is firmly in the latter camp. He believes that the 15 per cent tax proves little of a disincentive to speculators.
“It won’t hit Hope anyway, because we’re not the house flipping market destination,” said Yeung. “We do not have any facilities for that culture here, that’s why it would be a hesitation for some of them.
“If you flip something, you need someone to catch it. You throw it, somebody needs to catch it.”
Yeung said Hope does not have a comparable field of buyers and sellers and therefore property flipping is challenging.
“In Hope, you’ll probably see more people that still want to buy, and house themselves here for retirement and all that,” said Yeung.
But Yeung warns that the inefficacy of the surtax would have a cascading effect on Hope. He elaborates that people in Metro Vancouver who cannot afford rent there are causing an eastward exodus.
“It pushes people to the Fraser Valley, and then people in the Fraser Valley get pushed even further in,” said Yeung.
Data from the Chilliwack and District Real Estate Board shows that the median price of single family homes in Hope has increased by 39.6 per cent in July 2016, as compared to July 2015.
But Yeung also doesn’t believe that hot money will go to other Canadian markets.
“It won’t go to Toronto. The living standard is very different, and the weather is the determinant factor. Toronto — extremely hot or extremely cold. In the west coast, the worst part is the rain anyway.”
Where Yeung and real estate agent and AdvantageHOPE director Shields disagree is how speculators would respond to the tax.
“To me it’s an unknown how we’re going to be affected,” said Shields. “It’s definitely possible that that money might look for another home. But my gut says that it’s going to go to Toronto or in British Columbia, to Kelowna or Victoria — that they’ll see an uptick.”
Shields qualifies that her expertise lies in commercial real estate, and said she has not seen much property flipping here.
But just like Yeung, she predicts that Hope will see an uptick in interest in real estate, nonetheless.
“I expect that we will see more interest, but we’ve already got a smoking hot real estate market right now even without any influence from what happens in Vancouver.
“So if it does happen here, it’s going to amplify what’s already going on right now.”
Shields states that the real estate market here has reached a level of activity comparable to the mid-2000s, based on number of properties sold.
“But the average price of a home has gone up considerably,” said Shields.
The average price of single-family detached homes, according to her data, sits at $311,974. 10 years ago, it sat at $173,490, which is $204,544, adjusted for inflation.
But Mayor Wilfried Vicktor believes that Hope still has “some of the best deals” and therefore will attract interest from buyers.
“There’s going to be more activity, foreign investment in the Valley, and I think people, will in anticipation of that extra activity will probably jack up the prices as well,” he said. “I’m not worried about it. It just will happen. It’s something we’ll just have to deal with.”
Mayor Vicktor said his bigger concern is housing supply for renters.