"It’s devastating to small businesses, tourism, and the people who invested in short-term rentals."
British Columbia's recent legislation affecting short-term rentals, particularly in places like Kelowna, has left countless property owners reeling. Many had business licenses, had followed all the rules, and then saw their rental potential stripped away. This abrupt change has majorly impacted small business owners and tourism, slashing their income streams and the value of their investments.
Buying a pre-sale property? Here’s the number one rule: *only buy it if you’re prepared to close on it*. Speculative buyers who bank on reselling at a higher price often get burned. Markets fluctuate, and buying with the hope of selling for a quick profit can be risky, especially when interest rates are unpredictable and financing tightens up.
If you’re purchasing a pre-sale unit:
1. Don’t Borrow Your Deposit – It’s best to avoid debt before you even close.
2. Get Financing in Order Now – With interest rates changing, make sure you have options lined up.
3. Don’t Count on Market Growth – Focus on deals that work with today’s numbers.
"There are some phenomenal buys out there, if you know who you’re talking to."
Today’s market is more favorable for buyers, particularly those who want to live in their new homes. While investors may be pulling back, end users—often downsizers or first-time buyers—are filling the demand. This is an ideal time for those with cash on hand to secure properties at attractive rates, especially in developments nearing completion.
1. Pre-sale Market is Slow: With high interest rates, the demand for new pre-sales has significantly decreased.
2. Developers are Pivoting: Many are shifting to purpose-built rentals instead of condos, responding to rental demand.
3. New Building Regulations: Developers face additional costs with accessibility requirements, adding to the challenge of affordability.
We’re seeing fewer new developments breaking ground, especially in pre-sales. This slowdown in building means fewer condos, townhouses, and single-family homes in the pipeline. The repercussions? In a few years, there’s likely to be a renewed housing shortage as demand outpaces new supply. This cycle is nothing new, but it can create opportunities for well-prepared investors to buy in at favorable times.
"The biggest mistake people make is buying pre-sales expecting the value to rise by completion."
Today’s market is complex, but for those willing to do their research and make informed decisions, there are still good investments out there. Consider these final insights:
1. Check the Developer’s Track Record: Established developers who have weathered market ups and downs are safer bets.
2. Be Patient: Look for developments that are nearly complete for the best value.
3. Prepare for Change: Stay updated on regulations and policies that might impact short-term rental options.
If you’re in the market for a property, take advantage of the slower pace, analyze deals, and make sure the numbers work for you—today and in the long run.
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