Metro Vancouver homeowners have grown accustomed to healthy increases on their annual B.C. Assessment notices, which are now landing in mailboxes.
What’s new this year is that condo values are also rising in the region, after a few flat years that saw condo construction outpace homebuyer demand.
“Condominiums, that’s apartments and townhouses, up until 2014 had been relatively flat over three years,” said Cameron Muir, chief economist of the B.C. Real Estate Association.
Over 2014, however, Muir said condo sale prices have risen in step with inflation. Condo prices in Vancouver and its nearer suburbs were up about two per cent as of July, when B.C. Assessment sets its values for the next year’s assessment roll.
Single-family home values were up a more substantial 6.5 per cent, Muir said, but some of the condo valuations were a departure from the previous year.
“We’re probably looking, in Vancouver, at sales (increases) of 16 to 17 per cent in 2014,” Muir said, “so, there’s much stronger demand, and we’re also seeing inventory levels steadily decline.”
B.C. Assessment doesn’t produce average assessment values for property types in Lower Mainland markets but does highlight representative examples.
In Vancouver, a typical east-side two-bedroom apartment increased 4.7 per cent to $381,000, from $364,000 a year earlier.
On Vancouver’s west side, values for a typical two-bedroom apartment rose 7.5 per cent (to $616,000), in line with the growth in value of a detached home on a 33-foot lot (up 7.5 per cent to $1.575 million).
In its real estate assessments a year ago, B.C. Assessment had highlighted decreasing condominium values in the range of four to five per cent — the second consecutive year that condo prices declined or offered minimal increases.
“Changes within a plus or minus five per cent range, that’s what we categorize as stable,” said Dharmesh Sisodraker, B.C. Assessment’s deputy assessor for the Vancouver Sea to Sky region, which takes in Vancouver and the North Shore all the way to Whistler.
Assessments, which are used by municipalities to set property taxes, tend to lag the overall market by the time they are released.
In east Vancouver, a typical detached house on a 33-foot lot saw an increase of 11.3 per cent, to $993,000.
In Vancouver Heights, typical detached home prices rose five per cent to $955,000.
“(Condominium) prices are still under pressure versus detached homes, mostly because there is so much (condominium) product on the market,” explained Ray Harris, president of the Real Estate Board of Greater Vancouver, and the increases in condo prices are “sporadic.”
In Metro Vancouver, demand for new condos has been in high-growth areas linked to rapid transit, such as the Marine Gateway development at Cambie and Marine in Vancouver or the Metrotown and Brentwood town centres in Burnaby.
“If a complex is in demand and there are not a lot of units in the market, you can get more of a lift,” Harris said.
Suburbs such as Burnaby, Coquitlam and Port Moody — communities either on SkyTrain, or where SkyTrain is being built — are among those that have seen modest increases in the range of two to three per cent.
However, the gains weren’t shared equally and some spots still showed decreasing assessment values. B.C. Assessment cited an example at Simon Fraser University’s UniverCity development, where the assessed value of a two-bedroom highrise unit declined 2.5 per cent from 2014.
“There are a few pockets where values decreased slightly,” said Zina Weston, a deputy assessor for B.C. Assessment in its North Fraser region, which takes in the eastern suburbs closest to Vancouver.
“If there is a lot of building that comes on in a short period of time in a finite area, there might be some (downward) pressure on pricing,” Weston said.
Harris added that condo owners trying to re-sell are having a tougher time because developers are selling new units at lower prices than they would be if the market were stronger.
Condo values also declined in Fraser Valley suburbs from Langley to Chilliwack, where single-family home prices are in the reach of more buyers.
Dan Scarrow, a vice-president at Macdonald Realty in Vancouver, added that some municipalities are more encouraging to condo developers and “as a result of that, maybe some areas tend to get overbuilt.”
“Then, in some municipalities, say Vancouver, it is more difficult to get a project off the ground, but demand is actually quite high,” Scarrow added.
Markets that rely on recreational property sales — such as Whistler, the Okanagan and Kootenays, where sales collapsed and values declined following the 2008 recession — also took part in some of the rebound in 2015 assessments.
B.C. Assessment cited examples in Kelowna where assessments were up from four to seven per cent. In Whistler, a typical home in the White Gold area increased in value 7.4 per cent, to $1.06 million.