Governments lose revenue as housing sales drop in Okanagan

Slow sales lead to loss in revenue across all stakeholders involved in new-home construction

Only 2,357 homes were sold this June in the Central Okanagan, said the Okanagan Mainline Real Estate Board. That is 415 fewer homes than the same time last year.

The decline may not seem detrimental, but its effects are far reaching said Cassidy deVeer, president of the Canadian Home Builders’ Association Central Okanagan (CHBA-CO).

“There is a ripple effect when sales and new homes are postponed or cancelled,” deVeer said. “It’s not just the home builders, but all those who service and supply the industry.”

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“A flooring supplier representative told me yesterday that his residential sales are way down,” she said, and based on a new report, it is noticeable there is a direct impact on government revenues.

The report, commissioned by the BC Chapter of CHBA, studies the benefits new home construction offers government. It was not publicly released until now. The report revealed that one new home built and sold in the Central Okanagan raises more than $94,000 in revenues split by the three levels of government.

“Housing affordability is an issue we hear about often and it’s a top concern of all Canadians,” deVeer said. “When buyers hear their homes include more than $94,000 in tax, you get their attention quickly.”

The report looked at both fees and taxes directly levied on the construction and sale of new homes and additional revenues generated through income taxes and taxes on the construction materials. Provincial sales taxes generated by the purchasing of materials was also included, but the report did not take into account the Energy Step Code charges.

In order to better inform the public before the upcoming federal election, CHBA launched an awareness campaign on housing affordability.

The website affordability.ca summarizes factors affecting affordability while informing Canadians on issues with home ownership.

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@caitleerach
Caitlin.clow@kelownacapnews.com

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