Typically 25-30% of residences in Victoria are purchased by:
1) foreign buyers (typically 5% of that 25-30%)
2) Canadian (non-BC) residents purchasing a vacation home
3) Canadian (non-BC) residents investing in the Victoria market
4) Canadian (non-BC) residents purchasing a future retirement home
5) BC residents not residing full-time in Victoria purchasing a vacation home
6) BC residents not residing full-time in Victoria purchasing an investment
7) BC residents not residing full-time in Victoria purchasing a future retirement home
The above buyers are made up of people who either a) do not spend 100% of their time in Victoria but do visit and use their property, b) who never spend time in Victoria (the unit is 100% an investment rental) or never use the property, or c) who either spend limited amounts of time or zero time in Victoria but plan to retire here full-time in the near or medium term.
New rental regulations have already impacted all categories on that list as purchasers may no longer offer their unit for rent with a fixed term, unless they a) plan to move into the unit or b) the unit is owned by an "individual" and that individual is moving into the unit even on a short term basis.** This means some units may no longer be purchased as would-be retirement homes, vacation homes or purely for investment reasons.
AirBnB regulations have also hurt the short-term rental opportunity the above buyers were counting on, which means, again, some units may not be purchased if they cannot be rented out on a purely short-term basis.
And now taxes will come in and further dampen the drive to purchase a home in Victoria. This will particularly hit a) retirees who will be faced with a significant tax hit on their future home and b) renters who, if the landlord wishes to maintain the unit as a full-time rental or a rental prior to retiring in Victoria, will now be paying a higher rent in order to cover the landlord's taxes.
The above 25-30% of the buyer pool is a massive component of a developer's financial backing. If that pool is reduced it could literally spell the end of some projects, which means housing for the remaining 70% of local of purchasers won't be built, which means housing costs will climb.
** We're still clarifying what the wording from the government actually means in that regard.