Aside from Private companies and the natural resources that abound in a country, another sector that often contributes significantly to the growth of a nation’s economy is the Real estate sector. Although often overlooked, the real estate sector plays an essential role in developing the nation’s GDP. Take the United state, for example; the real estate sector contributes to about 20% of the nation’s GDP.
Also, according to the 2018 market analysis, it was reported that the commercial real estate sector was worth an estimated $16 trillion in the U.S. alone. If anything, this shows just how lucrative and important the real estate industry is.
However, as promising as this sounds, this sector also faces several challenges. And these challenges are not a “one-person” thing. Literally, these challenges affect everyone involved in the real estate market, such as the estate owner, investors, asset managers, tenants, etc.
Therefore, In this article, we will dive deep into the challenges the real estate sector in British Columbia faces today.
Mass Relocation of People
One of the common issues facing the Real estate sector in British Columbia is human relocation. As an estate owner or investor in B.C., you should always remember that humans will most likely change their location at some point, which will likely affect the real estate market.
Mass relocation is a very complicated situation because it’s very obvious that not everyone likes to change location abruptly. It is just that sometimes, people are likely to be forced to relocate to another place. And as you’d imagine, there are a lot of factors that can cause this sudden relocation. For example, the commonest one is marriage – people often change location when they get married. Other factors include Natural disasters (hurricanes, wide fire, floods, etc.), War, and not to forget the most important one, individual choices. A person can choose to change location without any notable reason.
According to CNBC, it is reported that in 2021 alone, there were about 20 cases of natural disasters in the United States. And this led to the loss of over 1 Billion dollars.
You may be wondering, how exactly does this affect the real estate market? In those 20+ natural disasters, many houses were destroyed in the process (the Oregon fire disaster being a notable example); thus, mass evacuation happened.
British Columbia’s mountainous terrain means the state will be prone to natural disasters such as landslides, glacial outburst floods, snow avalanches, and seasonal floods. And when any of these happens, there will likely be another mass relocation, which will either positively or negatively affect the state’s real estate market.
Lack of Quick Sales
Finding buyers for an estate is another serious issue facing the real estate business in B.C. As a Real Estate owner or a realtor, finding buyers ready to pay for the estate In full cash can sometimes be tiring.
In British Columbia, many factors are usually responsible for this challenge. For example, the estate in question may be too expensive. Before venturing into the real estate business, many estate owners and investors often make the mistake of not analyzing the demography and the current standard of living of where they are building their estate. They just build without considering if the people there can afford such houses. And when things like this happen, real estate agents often struggle to sell the property quickly.
Also, In BC, Liquidity is a huge issue for brokers, especially if the realtor fails to use a proper marketing plan to attract and retain customers for quick purchases.
Aside from the quality of the property itself, before venturing into the real estate business, there are some other things that you need to know or understand. The first is knowing how to sell a property without breaking a sweat. When you understand how to sell a property faster, problems regarding real Estate in B.C. will reduce considerably.
Government Decision
You may not know this, but government policies and interference are other issues facing the real estate market in British Columbia.
Government policies like mandatory building permits, zoning, hike in foreign buyer tax, permits, and other rigorous regulations in one way or another have added to the issues facing the real estate business in British Columbia.
For example, in 2018, the B.C. government, in particular, introduced some policies that they thought would cool the provincial housing market. Some of the policies include incrementing a foreign buyer’s tax vacancy tax. These two policies have had lots of negative effects on the real estate market.
The effects of these government policies were made known to the general public in March of 2019 when Canadian Real Estate Association reported it that real estate sales in British Columbia had fallen 23% year over year – the worst since 2013. And since then, there has been a notable drop in real estate sales activity.
The sad truth is some of these policies are still in use today. And if anybody in B.C. should decide to ignore these regulations, the person could face the full wrath of the law.
Solutions to Some of The Issues Facing BC’s Real Estate Market
There is no harm in asking for directives from an expert if you don’t understand how the real estate business in B.C. works. If you are trying to invest in the real estate market in B.C., ensure that you consult real estate experts because only experts can give you all the right information.
And lastly, always prepare yourself for any unforeseen challenges. By preparing yourself, you can navigate through everything B.C. throws at you.
