For those of us living in Canada, October 17th 2018 marked "Legalization Day". Cannabis officially became legal to consume, grow, and for some, sell. But with legalization, comes many questions. One of the most pressing questions for many homeowners, landlords and buyers is, how will this effect property value?
By law, each Canadian household will be allowed to cultivate four marijuana plants.
There are many different variables that come into play, when it comes to increasing or decreasing the property value of a home, and buyer attitudes is one of them. How the population percieves an estate plays a role in whether or not the property is more likely to sell or not.
According to a new report on cannabis and real estate from Zoocasa, 52 per cent of Canadians say they'd be less likely to consider specific houses for sale if they knew a legal amount of cannabis was grown in it.
Baby boomers (54 to 72 years old) and Gen Xers (38-53 years old) were more likely than millennials (22 to 37 years old) to think a legal amount of pot grown in a home would reduce their desire to buy it. Nearly six in 10 of boomers and Gen Xers (59 per cent and 58 per cent, respectively) agreed, compared to just over a third of millennials (38 per cent).
The study conducted by Zoocasa also stated that over half of current homeowners (57 per cent) believe growing a legal amount of cannabis would harm a property's resale value, while 26 per cent disagree and 18 per cent are unsure.
Legalization is still a relatively new concept and not enough research or education has been provided on the subject when it comes to devaluing your home. Prior to legalization, there were mortgage and insurance consequences for those who smoked or grew cannabis in their homes, and there has yet to be any concrete clarification as to how this will change now that homeowners are legally allowed to grow.
So What About Dispensaries?
Indoor cannabis consumption and cultivation aside, almost half (48 per cent) of respondents said the presence of a dispensary would reduce their desire to purchase a property, and almost as many (42 per cent) feel having one in the neighbourhood would harm the value of nearby homes.
Less than a third of respondents (31 per cent) said they're comfortable with a dispensary opening in their area, compared to 59 per cent saying the same thing about liquor stores.
In the end there is no clear answer, and the only real way to see how legalization will affect property value, is to see over time. Buy attitudes are subject to change over time as well. What may be seen as taboo or negative can soon become a norm, many years later.
It's still very important to keep trends and attitudes in mind, when selling your home. You always want to get the most out of your investment.