Property assessments climbing again
Property assessments for detached houses in Vancouver have risen in the range of 10 per cent for this year, but so have assessments in Squamish, suggesting that perhaps COVID-19 has started to drive a dispersion of the Lower Mainland's population.
The B.C. Assessment Authority started sending assessment notices on Jan. 1 to just over one million Lower Mainland property owners, which show “relatively moderate increases in value” from zero to 10 per cent, according to deputy assessor Bryan Murao.
“I think the surprising part, if anything, was that, with COVID-19 coming in around March, it doesn't seem like it really impacted the residential real estate market,” Murao said.
The number of property sales dropped 40-55 per cent in April and May, but quickly bounced back.
“The story may actually be in Squamish when it comes to single-family homes,” said Andy Yan, a demographer, urban planner and director of the City Program at Simon Fraser University.
Vancouver and Squamish saw the biggest increases (10 per cent) in assessments for detached homes, to $1.72 million and $1.03 million respectively.
Houses in Pemberton and Port Coquitlam saw the next steepest increases, at eight per cent, to medians of $945,000 and $944,000 respectively, while both the city and district of North Vancouver weren't far behind at seven per cent.
“That's another story: Is COVID-19 the catalyst for the Great Dispersion?” said Yan, referring to a theory posed by New York University marketing researcher Scott Galloway that the pandemic is changing the physical distribution of people and products.
Murao said intra-provincial migration numbers aren't officially available, but assessments don't appear to show a dispersion effect yet, because urban assessments continue to rise.
“I know, anecdotally, that some people are moving from urban areas to non-urban areas, but they appear to be being replaced ( by other buyers),” Murao said.
Detached homes in Burnaby and Surrey saw median assessments on detached houses rise six per cent and five per cent, to $1.45 million and $1.06 million respectively.
“Maybe if COVID-19 hadn't hit, would there have been even larger increases? It's hard to say,” Murao said.
“But (assessments) didn't fall, that's for sure.”
Homeowners can check their assessments at bcassessment.ca, as well as comparative sales in their neighbourhood.
Yan cautioned about reading too much into assessment data, since it essentially captures sales information only up until July 1, the cutoff for B.C. Assessment's official calculations, which represents just the first few months of the pandemic.
“You've also got to remember, COVID-19 has affected the population very unevenly,” Yan said.
The service sector, particularly tourism, has been hard hit, but workers in those industries weren't likely on a track toward home ownership to start with.
Professionals who were in a position to work from home before the pandemic likely haven't lost jobs, Yan said, so “the economic foundations for some people were interrupted, but not disrupted.”
In April, the Canada Mortgage and Housing Corp. predicted that home sales might plunge and prices fall as much as 19 per cent in 2020. But mortgage interest rates dropped instead, which helped spark sales and rising property values, Yan said.
“It's not as if prices are suddenly soaring, but they're just slowly increasing to something that's perhaps more normal” and not the steep increases experienced in 2015 or 2016, Yan said.
By contrast, 2020 assessments across the Lower Mainland declined by 11 per cent, dropping the typical detached house to $1.7 million and condo to $686,000.
Assessments on strata-titled properties, condominiums and townhouses also rose for 2021, but Yan said the largest increases occurred in the District of North Vancouver, at six per cent to a median of $732,000, and the City of North Vancouver at five per cent to $690,000.
Maple Ridge's median condo assessment was up five per cent to $457,000. Yan said those represent areas where units tend to be larger, and people are beginning to “value the importance of space.”
“No matter how much (of a) `Marie Kondo Minimalist' kind of living you can do, it's pretty hard to Marie Kondo a three-year-old (child),” Yan said.
“And what happens when it's a three- and five-year-old? Then very little sparks joy in a 700-square-foot condo.”