New official estimates show much smaller increases across B.C. than 2021′s massive spikes because rising interest rates had already begun cooling many of these real estate markets.DARRYL DYCK/The Canadian Press
The assessed value of homes rose in almost every community in British Columbia last year, but new official estimates show much smaller increases across B.C. than 2021′s massive spikes because rising interest rates had already begun cooling many of these real estate markets.
BC Assessment, a provincial Crown corporation, released five new reports on Tuesday showing trends in scores of communities across the five different regions of the province, with most owners of single-family homes and condos located in and around Vancouver seeing a 9-per-cent lift in their assessed values. In Vancouver, for example, the agency said a typical detached house is now assessed at $2,125,000 compared with $1,994,000 the summer before.
Further east in the Fraser Valley, where housing prices exploded in the earlier parts of the pandemic, houses saw their assessed values rise roughly 10 per cent and attached units – condos and townhomes – rose 15 per cent compared with the previous year.
On Vancouver Island, homeowners saw their properties rise in assessed value anywhere from 10 per cent to 20 per cent, the agency stated, with detached houses in the Okanagan region rising up to 15 per cent in value.
But, assessor Bryan Murao said these assessments are a snapshot of the local markets on July 1, 2022, when prices had already begun falling in many places after peaking before the Bank of Canada started raising interest rates.
The market momentum is now quite a bit different from last summer, Mr. Murao said, with an unpredictable stalemate developing in many markets between buyers wanting better deals and sellers stubbornly refusing to drop prices.
“If anything is surprising, it’s perhaps that it’s not deep into a buyer’s market,” said Mr. Murao, who has worked at the agency for more than 15 years.
Jesse Kleine, a realtor in Vancouver and its eastern suburbs, said these latest assessments will further confuse some sellers as to the true value of their homes.
For example, Mr. Kleine said, a three-bedroom rancher he was showing this week in Langley was first listed last July for $1.14-million. The owners have since dropped the price three times and are now asking $998,888. But, he said, their new assessment just pegged the value at $1.25-million.
In a normal market, an assessment might be off by up to $100,000 owing to not taking into account a house’s location on a busy street or the state of its interior, said Mr. Kleine, who has been selling real estate for six years. But, now with the downturn taking shape in Metro Vancouver, he said these assessments “can easily be off by a quarter million.”
That is leading to some difficult conversations when an agent meets with a seller to discuss what price to list their unit at, said Mr. Kleine, who said he just sold a house in Abbotsford for $899,000 that was assessed for $1.05-million.
This widening gap between assessed values and what buyers are willing to pay for a home has largely hit the suburbs to the south and east of Vancouver, he said, but it could soon spread to Vancouver proper if interest rates remain high throughout this year.
Andy Yan, adjunct professor and director of Simon Fraser University’s City program, was struck by the largest assessment increases on the South Coast occurring in communities such as Pemberton, north of Whistler, and Sechelt on the Sunshine Coast. This, he said, still reflects the pandemic trend of white-collar workers moving further from city centres to work from homes with more space.
Penny Gurstein, director of the University of British Columbia’s Housing Research Collaborative, which studies ways to improve the affordability of real estate, said these assessments have not been a real indicator of a home’s market value in volatile Metro Vancouver “for a long long time.” Instead, she said, these evaluations are mostly of use to municipal governments.
BC Assessment estimates values on behalf of B.C. municipalities, which use the data to determine how much homeowners will pay in property taxes. The agency could not provide the total value of real estate across the province, but last year these assessments totalled $2.44-trillion, an increase of nearly 22 per cent from the year prior.
Mike Hager