The Vancouver real estate market is being blanketed by a record rate of single-family detached houses assessed at $1-million or higher.
More than 91 per cent of 66,752 detached homes surveyed within the city had assessed values of at least $1-million on July 1, 2015, and prices have jumped at least 10 per cent since then, according to researcher Andy Yan. His study shows that the proportion of detached properties assessed at $1-million or more was 65 per cent on July 1, 2014.
Values for detached houses have skyrocketed amid low interest rates, a buoyant economy, limited listings, an influx of buyers from China on Vancouver’s west side and baby boomers helping their adult children with down payments, Mr. Yan said.
Over a one-year period, assessed values have surged roughly 25 per cent in many neighbourhoods, translating to increases in some cases of $230,000 on Vancouver’s east side and $570,000 on the city’s west side, BC Assessment data show.
The provincial Crown corporation estimates values on behalf of B.C. municipalities, which use the data to determine how much homeowners will pay in property taxes. Homeowners who have seen their assessed values climb higher than the average will face steeper property taxes, however, for the most part, increases in actual household tax bills won’t be nearly as high as the percentage jumps in assessments.
The geographic line drawn by Vancouver real estate buffs to symbolize the million-dollar divide in housing prices has been shifting ever eastward over the years.
Houses formerly assessed for less than $1-million are now part of a landscape where the vast majority of the city has turned into the million-dollar club.
Mr. Yan has produced a new map showing that 32 per cent of detached properties were valued at $2-million or higher last July, with most of those higher-end houses on Vancouver’s west side.
“Is this a measure of Vancouver’s livability? A sign of success or a threat to the city’s affordability? It is local residential real estate attracting global capital. But there are consequences for young families,” said Mr. Yan, an urban planner with Bing Thom Architects and acting director of Simon Fraser University’s city program.
He said the downside includes overcrowding, as some families cram into smaller spaces to stay in the city, and pressure for many residents to move to some of Vancouver’s less-expensive suburbs or out of the region entirely.
Ballooning consumer debt and urban sprawl are among the other consequences of high real estate prices, Mr. Yan said, adding that an underfunded public transportation network discourages certain families from moving deep into the suburbs, where housing costs are lower and transit expenses are higher.
Properties valued at less than $1-million in Vancouver proper are mostly on busy streets or skinny lots, or they have sketchy histories – such as the recent sale of a house that was a former marijuana grow-op.
A pattern has formed that wealthy buyers from China are keen on three high-end neighbourhoods on Vancouver’s west side, said Mr. Yan, who recently studied 172 sales of detached houses over a six-month period that began last summer.
He found that 66 per cent of the purchasers in that study had non-anglicized Chinese names.
He believes there has been a ripple effect from a wave of Chinese money.
But real estate industry officials have pointed out that there were 3,974 sales of detached properties within Vancouver’s city limits last year, playing down the impact of foreign buyers.
“It’s both supply and demand,” Mr. Yan said.
“It’s the alignment of the stars.”
The average assessed value on July 1, 2015, was $1.9-million in his survey, compared with $1.6-million on July 1, 2014.
The average price of detached houses sold in November in Vancouver reached $2.53-million, up 27.7 per cent from a year earlier.
For Greater Vancouver, which includes suburbs such as Burnaby and Richmond, the average price for detached properties in December rose to $1.65-million, gaining 22.5 per cent over the past year.Report Typo/Error