Assessments on condos rising more rapidly than detached homes in city of Vancouver
David Carrigg & Derrick Penner
The Province
The assessment authority, this week, started mailing 2019 property assessments to owners, based on market values as of July 1, 2018, which show declining values in Metro Vancouver for the first time in about a decade.
Assessments offer a bit of a “backward look” at changes in markets, said demographer Andy Yan, director of the City Program at Simon Fraser University, but do offer a baseline for acknowledging that changes are happening.
“We’ll only know moving forward, is this a break in the weather, or is this climate change,” Yan said.
“Are we seeing the slight kind of flattening (in markets) versus a fundamental change that has encapsulated British Columbia and the Lower Mainland for the last 10, 20 years?”
Generally, assessments show that across the city of Vancouver, detached homes dropped an average of four per cent in value, while condo values rose six per cent.
In North Vancouver, detached home values fell on average four per cent, while assessments on condos rose seven per cent.
Yan was reluctant to offer a forward-looking forecast. He would only say that even with new taxes, stricter mortgage qualifications and declining inflows of foreign capital into property markets, “it’s not affordability in our time.” when it comes to prices.
“We haven’t seen that yet,” Yan said.
Broadly speaking, the range of value change for a single detached home on its assessment in the urban areas of Greater Vancouver will be from negative 15 per cent to plus 10 per cent. In the Fraser Valley the average range is negative 10 per cent to plus 15 per cent.
The divergence between Metro Vancouver detached-home prices declining, or rising in smaller increments than more rapidly increasing assessments on condominiums will likely be enough to shift some of the region’s tax base away from houses and on to strata-titled properties, said University of B.C. economist Tsur Somerville.
“For sure, taxes are going to go up, on a percentage basis, faster for condos than single-family (homes),” said Somerville, a senior fellow in UBC’s Centre for Urban Economics and Real Estate.
B.C. Assessment deputy assessor Keith MacLean-Talbot, in a statement, said assessment increases don’t automatically translate into bigger tax increases.
It is “how your assessment changes relative to the average change in your community is what may affect your property taxes,” MacLean-Talbot said.
However, on housing affordability, property appraiser Paul Sullivan argues that conditions are still getting worse for would-be buyers trying to get into the market, even if prices on detached homes in Vancouver are declining.
Assessments on Metro Vancouver’s most expensive homes have seen the steepest declines, but Sullivan said that is of the least consequence to average buyers.
In Vancouver, Chip Wilson’s Point Grey Road mansion is still the most valuable residential property in all of B.C., at $73.12 million — but that’s $5.717 million less than the property’s value on July 1, 2017. B.C.’s second most valuable home, on the 4000-block of Belmont Avenue in Point Grey also saw a valuation drop — of $6.354 million — to a paltry $65.466 million.
Sullivan blames the NDP government’s additional taxes on high-end homes, such as the school surtax on homes over $3 million.
“At the high end of the market (values are down) 10 per cent, at the low end of the market, they’re up 10 per cent, generally speaking,” Sullivan said. “And I say that is squarely the result of taxation.”
“That has had the opposite effect on creating affordability in the city of Vancouver,” Sullivan said.
Yan said external forces, such as the Chinese government’s attempts to curb the amount of capital flowing out of the country also have to be factored into changes in property markets here.
That, Yan said, along with new taxes and stricter mortgage-qualification rules for buyers that came into force last year are all factors that didn’t exist in the market a couple of years ago, but will influence what happens in the year ahead.
Elsewhere in the province, B.C. Assessment figures show an average jump of 23 per cent for condo owners in Whistler (to $962,000), and a 19 per cent jump for condo owners in Squamish (to $583,500).
In West Vancouver, at the start of the road to Whistler, detached property owners can expect a 12 per cent average drop in value to $2.8 million, the biggest average fall in value for that class of home in the Greater Vancouver region.
In the Fraser Valley region — that includes Surrey and Richmond — the biggest winners among detached residential property owners are deep in the valley, with Chilliwack values growing 10 per cent (to $613,000), District of Hope rising 17 per cent (to $416,000) and District of Mission 10 per cent (to $698,000).
In Abbotsford, condo owners will see their assessed values jump on average 28 per cent (to $353,000), while detached homeowners will see an average 9 per cent rise (to $758,000).
City of Langley condo owners will see a 27 per cent average jump in valuation (to $396,000).
Surrey homeowners will receive an average four per cent rise for detached homes (to $1.042 million) and 14 per cent for condos (to $522,000). Single family homeowners in White Rock and Richmond will see an average two per cent drop.
MacLean-Talbot said homeowners who are not happy with their assessment should contact the authority as soon as possible in January for an independent review.
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