Metro Vancouver assessments down: Forces slowly lowering property values for most homeowners
Credit to Author: Douglas Todd| Date: Fri, 03 Jan 2020 01:28:18 +0000
Headlines highlighting how the values of almost one million homes in the Lower Mainland have dropped in the past year will likely hand worrying news to those who just bought a place, a mixed message to longtime homeowners and good tidings to the many desperate to purchase a dwelling for the first time.
This second downward year in a row in Metro Vancouver prices — after more than two decades of fast-rising values — suggests new B.C. government taxes aimed at limiting foreign and domestic property speculation are having an impact, even while the Lower Mainland’s population continues to grow through in-migration.
The B.C. Assessment Authority will send out notices to Greater Vancouver households in the next few days informing them that the estimated values of their detached houses have dropped significantly, especially in high-end neighbourhoods like Vancouver’s Shaughnessy and West Vancouver’s British Properties.
The 2020 assessments, which reflect market values based on July 1 of last year, are down about 11 per cent overall in Vancouver, which means the average value of a detached house is now $1.7 million and a condo runs around $686,000.
Values have also dipped by about 11 per cent in Burnaby, Port Moody, the City of North Vancouver and Coquitlam, as well as by 14 per cent in Richmond and by 16 per cent across posh West Van, where the average price still hovers at a king-sized $2.4 million. This year, unlike last year, values also declined in many Fraser Valley cities, with Abbotsford dipping by four per cent.
Meanwhile, condo prices in each region generally depreciated by a few percentage points less than detached homes.
The only Lower Mainland municipalities that saw a rise in prices were the international ski resort of Whistler and the neighbouring village of Pemberton, where values jumped by five per cent. The price of a typical detached dwelling in fashionable Whistler has now climbed to $2.03 million.
Unlike the rest of the Lower Mainland, neither Whistler nor Pemberton is subject to the B.C. government’s foreign-buyers tax or new speculation and vacancy taxes. Many other places in B.C. that aren’t subject to the taxes, like Port Alberni, Kamloops and tiny Alert Bay, also saw valuation hikes this year.
While many global and local factors are at play in housing, the B.C. government and Municipal Affairs and Housing Minister Selina Robinson take justifiable credit for having at least a partial role in diminishing prices in real estate hot spots like Metro and parts of the Fraser Valley.
“This is a positive sign that our government’s efforts to make housing more affordable for more British Columbians are having a real impact. For too long, the previous government sat back and watched housing prices climb well out of the reach of average people,” Robinson said. “We are encouraged by signs that property values are continuing to stabilize.”
Even though the decline in assessed values in Metro and most of the Fraser Valley is hard news for people who took out mortgages to buy new homes in the past two years, the B.C. government is using taxation to decrease demand in an effort to achieve what many call a “soft landing” in prices. That’s after spectacular increases, especially since 2014.
Vancouver home values have risen by 206 per cent since 2000, according to The Economist’s Global Cities House Price Index. That’s the most dramatic two-decade real estate market increase among 40 of the world’s most sought-after cities, most of which offer locals much higher median wages than Metro.
Read it and weep. Interactive chart shows #Vancouver prices jumped by 206% since 2000 – most extreme of the world's 40 'prime' cities. #Toronto almost as bad. Even sought-after San Francisco 'only' went up by 54%. #Vanre #BCpoli #CDNpoli https://t.co/GSXU6KXKNb via @TheEconomist pic.twitter.com/dM7CRwgGZG
The fractional housing price declines in the past two years in Greater Vancouver will only go a small way to reduce bleak calculations by Demographia and several other global housing agencies, which rank Metro as one of the most unaffordable cities in the world.
The drop in assessed values in Metro comes despite the region growing each year by almost 40,000 new people, four out of five of whom are foreign-born. Housing analysts, such as Firm Capital Corp., say Canada’s record growth in immigrants, international students and guest workers has an enormous impact on housing.
The good news, at least for those in Metro who haven’t yet bought a house or a condo, is that neither offshore investors, newcomers nor domestic buyers are putting as much pressure as they once did on the region’s luxury abodes.
The assessed values of properties in Shaughnessy, where many homes sell for more than $12 million, have dropped by 17 per cent. The mansions popping up on the slopes of the British Properties, where the average price is $3.5 million, have also slackened in value by one-fifth. Slumps are also being felt in South Surrey, South Burnaby, parts of Richmond and Vancouver’s Point Grey.
While the vast majority of Metro residents are nowhere near able to step into the opulent market, more than a few analysts emphasize that real estate trends in tony neighbourhoods often serve as bellwethers for surrounding communities.
In other words, barring unforeseen circumstances, there’s a decent chance the many factors that are grinding away at mountain-high prices in places like West Van will trickle down to most of the region.
• Homeowners can check their assessments online at bcassessment.ca.
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