January 2020

IN THE JANUARY ISSUE:

• 2020s: The corporate community look                 • Year-end review for Greater Vancouver real estate

• BC Assessments — some explanations                  • Toronto, Vancouver skew national sales average

      This decade, the Twenties, is here. Its predecessor, a century ago, became the “Roaring Twenties.” Sandwiched between world wars, it was a decade of decadence — growth that turned silent movies into talkies, buggies into automobiles for the masses. Communication was principally newspapers and radio, and sports heroes and movie stars became celebrities. In that vibrant economy, real estate prices soared. While nobody knows if these Twenties will mirror that, there are theories about what neighbourhoods will look like over the next decade. In part three of a series about the 2020s, News From Nexus looks at the part corporations may play.
     The buzz word for real estate in the 2020s may turn out to be “placemaking.” By definition, it is a multi-faceted approach to planning that, among other things, makes use of under-utilized space to address the habits of the locals.
     In the Lower Mainland, that may mean re-tooling a community, or building new ones, to accommodate what is a growing population. It may mean 90 per cent occupancy and building more density to try and deal with affordability.
     Where do corporations come in?
     If what’s happening elsewhere in the Western World is an indicator, there will be more “landlords” of the corporate kind. In a trend that began in (and has now returned to) the U.S., corporations are developing “build-to-rent” homes to address affordability, specifically the needs of young professionals who have been priced out of ownership.
     Corporate investment groups may be funded by investors who are looking for stable returns — such as pension funds. To make such communities attractive, things like entertainment centres, retail stores, restaurants, daycares and supermarkets can go a long way to creating a neighbourhood that becomes more and more self-contained…all of it controlled by corporate ownership.
     The number one driver in real estate development is the shortage of housing, the supply and the demand. This kind of development will affect the alternatives available to both renters who don’t have the resources to own and to the buyers who do. Long-term renting is a long-standing staple on lands owned by the First Nations, and continues. 
     Densification is already underway throughout the Lower Mainland, and the corporate world is well aware of the opportunities that come with densification. If corporations are going to get heavily involved, they want to be good corporate citizens…good landlords.
     There is space to be developed, even in downtown Vancouver. Check under the Granville Street Bridge, where pie-shaped buildings now reach  up through the space between ramps on and off the bridge, and are grounded in an area that has the makings of being a “chic” attraction of shops, cafes and retail outlets.
     Think not? Well, the developer thought enough of it to suspend a work of art — called Spinning Chandelier — under the bridge, at a cost of $4.8 million!

BC assessments for taxes, not market value

     What you need to know about the property assessments the provincial government sends out this month is that they:
               • are calculated for tax purposes
               • are six months old by the time you receive them
               • will be 18 months old when you await your next assessment, in December 2020
               • reflect the assessed value of the property, not the current market value
     In December, the government previewed its 2020 property assessments by saying in a press release: “When properties similar to your  roperty are sold around July 1, those sales prices are used to calculate your assessed value…to make sure your assessment is fair and accurate as compared to your neighbours.”
     The cut-off date for property assessments is July 1 each year. The assessments are finalized and mailed out on January 2 each year. That means a property assessment done on July 1, 2019 stands until January 1, 2021.
     For tax purposes, that is.
     So while assessments are based on market conditions, they're old market conditions. If the market has been stable since the assessment, the assessed figure could be close to the property’s market value. It could also be substantially higher…or lower.
     Market value is determined by what similar houses are selling for at that time. Chances are the changes in assessment have already been reflected in selling prices by the time of the transaction.
     Property assessors calculate property values for tax purposes, based on the past. They are not allowed to speculate about future market conditions.
     If your property assessment has dropped since January 2, 2019, that doesn’t necessarily mean your home is worth less — what has the market done in the months since the assessment was calculated?
     Assessments also vary according to where you live. For example, according to BC Assessment’s reliminary figures, single-family homes on the North Shore could have a drop of up to 15 per cent in assessed value, while single-family homes in Kamloops could have an increase of up to 10 per cent.
     The best way to determine the true value of your home is to consult your realtor, who will do all the research necessary to produce the most up-to-date “assessment.”