Last year was a slow year for real estate sales in Metro Vancouver. Total sales were 20.3% below the 10-year sales average. So, it should be no surprise that the value of real estate in the region would drop. And this is reflected in the new BC Assessments that have been sent out earlier this month. Some drops are substantial, but note if you do not need to sell or refinance your property now, then it doesn’t really affect you.
Lenders do NOT reassess your property at renewal as long as you don’t miss any payments. So, for people who bought their property with 5% down payment and the assessment is down 15%, you do not need to be concerned about being kicked out of your home at renewal.
And property taxes are not based on the absolute value of your home. The BC Assessment value is used to determine the proportion you owe of the total city tax budget. So, having your property value drop does not mean you pay less property tax this year versus last year. In fact, this year the city of Vancouver has decided to raise the budget, so most people will be paying more this year.
Note BC assessments are estimates based on July of last year. An appraisal is the only way to determine current value for your home. However, the market has picked up since the fall, so the actual value should be higher. In fact, this trend continues. The sales in December were 9.5% above the 10-year December average.
The sales-to-active listings ratio for detached homes is 15.2%, for townhomes is 25.7% and for apartments is 32.5%. The sales-to-active listings ratio is a measure of supply and demand. When the ratio is between 12 and 20%, the market is considered balance
This supply and demand dynamics is reflected in the price increases. In December the prices of detached homes went up 0.6%, but over a 12-month period the price dropped 4%. The prices of townhomes went up 0.7% in December, but lost 2.4% over the last year. And finally, the price of apartments went up 0.8% in December but lost 2.75% over the last year.
Will this continue in 2020? CMHC, BC Real Estate Association, Royal LePage and Central 1 Credit Union all put out releases to say that they believe real estate sales will strengthen; however, they differ on what will happen to the prices. It ranges from “breaking new records” to “flat”. I don’t see any reasons for new records, so I am siding with the “flat” camp.
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