It's property assessment time in Metro Vancouver, otherwise known as that time of year when tens of thousands more join the Millionaires Club – at least on paper.
You're likely sick of hearing about housing prices in the most expensive real estate market in the country. So am I. Yet it's difficult to ignore the scale of what is taking place on the West Coast.
Earlier this week, BC Assessment, the agency that puts a value on housing units in the province, released the valuations for 2016. They were absolutely mind-blowing.
We're talking the biggest increase in assessed worth in more than 30 years, increases that ranged from 12 per cent to nearly 30 per cent. Some people living on the so-called modest east side of Vancouver saw their home assessments jump by $300,000 or more. Those living on my street in a suburb a half-hour south of downtown saw a 20-per-cent increase in the assessed value of their homes.
Of course it means our property taxes will go up, but who cares? Look what we're sitting on! Some of my friends who bought humble abodes on the west side of Vancouver in the early 1980s have won the lottery. Their places are now worth more than $2-million and, in some cases, far, far more. Their retirement nest egg is suddenly so big it will finance river cruise tours of Europe from now until it's time to gather around the TV in an old folks' home. They are literally laughing all the way to the bank.
They even manage to keep a straight face when talking about how awful it is that investors from mainland China are driving up prices so dramatically. The truth is, homeowners in Vancouver don't think it's terrible at all. They think it's great. Foreign purchasers have helped them become multimillionaires. And this has a cascading effect throughout the region. Everyone is benefiting from what we are witnessing.
The one group that isn't amused is the first-time home buyer. Where are they supposed to come up with the kind of down payment necessary to mortgage a $1-million home? Many can't, and are coming to grips with the reality of raising a family in a townhouse or condo. Welcome to New York or Rome or San Francisco or London. The good news for these young folks, however, is that many are going to inherit a pile of dough from parents who will eventually be selling the family home worth a gazillion dollars. So there is that.
Everyone wants the provincial government to do something about housing affordability in the region but, honestly, what can it do? Vancouver Mayor Gregor Robertson wants the province to institute a speculation tax to halt the practice of flipping homes, and a luxury tax to ensure that the wealthiest buyers pay extra (the idea being that perhaps this money could be put into a fund to help out first-time home buyers).
The B.C. government might look at a luxury tax, but only one that isn't too onerous. The fact is, it doesn't want to put a halt to this real estate tsunami. It's worth hundreds of millions to the provincial treasury. Real estate and construction have helped to lead British Columbia to having the No. 1 economy in the country. You think the government wants to do anything to interfere with that? Not a chance.
There will likely be some limited efforts made in this year's B.C. budget to help first-time home buyers, with an emphasis on limited. Otherwise, the provincial Liberals, devoted adherents to laws of the free market, aren't going to mess around with residential housing prices.
Prices will level off when people decide they aren't willing to pay the insane amounts being demanded for detached homes. (Or when interest rates begin to rise.) But with the Canadian dollar devalued as badly as it is at the moment, and Metro Vancouver being seen as a safe place for foreigners to invest their money, prices are likely to continue on the wild upward trajectory that they have been on for a few years now.
This boom won't go on forever, of course, but it will last a while yet. Meantime, every day in Metro Vancouver, a new millionaire is made. It's just that, in many cases, you'd never know it by the homes they live in.