The assessed value of houses rose in nearly every community on Canada’s West Coast during the second year of the pandemic, but new official estimates show smaller communities – not the province’s largest cities and their suburbs – had the biggest spikes.
BC Assessment, a provincial Crown corporation, announced Tuesday that new market values for detached houses increased more than 40 per cent as of July 1, 2021, in Hope, on the eastern fringe of the Fraser Valley, and in the small Vancouver Island towns of Port Alberni and Lake Cowichan.
Meanwhile, its deputy assessor Bryan Murao said, Vancouver’s values rose 16 per cent so that a typical single-family home had a value of just under $2-million, while assessments rose roughly 20 per cent in its pricey suburbs of Richmond, Burnaby and North and West Vancouver.
Mr. Murao, who has worked at the agency for 15 years, said the closest analogue to these massive spikes in value are the 2016 assessments, in which prices in and around Vancouver rose substantially before the provincial government began bringing in demand-side measures such as a tax on foreign buyers to cool the market.
These larger jumps in many smaller communities across the province were driven by some people leaving these supercharged urban markets looking for cheaper real estate or retirement options, he said.
“Let’s say you sold a property in Vancouver or you could suddenly work from anywhere, where are you going to live in a place that’s enjoyable?” he said Tuesday.
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 says the total value of real estate in B.C. is about $2.44-trillion, an increase of nearly 22 per cent in 2021 from the year prior.
These assessments don’t take into account the flurry of sales activity that occurred in the last half of 2021, Mr. Murao added, which proves the provincial real estate market remains resilient and that homeowners around the province can expect even higher assessment values for 2022.
Housing experts say this wave of new residents may offer a welcome boost to these smaller local economies, but their purchases are also hurting affordability for those already living in these communities.
Kishone Roy, the former president of the B.C. Non-Profit Housing Association who consults for government and non-profit agencies, said this once-a-year shock of massive property value increases underscores the inequality in a system whereby the average house owner saw their property gain $200,000 to $300,000.
“As a society, there’s this massive exponential increase in wealth, but the divide between the haves and have nots is perhaps creating a bigger gulf than at any point I can remember,” said Kishone Roy, who prefers the gender-neutral pronoun they. “What’s occurred is everybody is getting stuck in their current housing type: If you are a homeowner you may see this increase in equity – but not be able to buy anything different housing-wise.
“But if you’re a renter, that gap between home ownership is now increasing faster than all of your earnings from all of your work combined.”
Meanwhile, they said, the increase in home values leads to rising rents and that unaffordability trickles down to make life more difficult for homeless people.
Port Alberni Mayor Sharie Minions said it is exciting that people are choosing to move to the Vancouver Island community that weathered past downturns in the forestry sector and had a reputation for petty crime. Still, Ms. Minions, who is also a mortgage broker, said it is tough to balance this increase in home values with the dream of owning in their hometown becoming increasing more difficult.
“I really prided ourselves on being a community where someone in their 20s with a decent job – but not coming from wealth or anything like that – would be able to own a home and that is really changing now,” Ms. Minions said.
She said before the pandemic, a decent detached home cost around $200,000. Now, it is hard to find any of these houses for less than $500,000, Ms. Minions said.
Rents have also been affected, whereby a couple could find a lease on a two-bedroom unit for $800 before the pandemic but now would be lucky to find similar housing for $1,500, she said.
With a report from The Canadian Press
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