Rising real esate values a reality

Joseph Hildebrandt said he was shocked when he opened his mail Tuesday and read the latest property assessment notice for his Vancouver condominium.

The BC Assessment authority, which is mailing its 2007 notices to B.C. property owners this week, valued Hildebrandt's one-bedroom, downtown condo at $53,000 more than it was assessed last year.

"It was a whole lot higher than I was expecting," Hildebrandt, 36, said, adding the latest increase is far greater than in previous years.

"It makes me feel more comfortable that I got into the market when I did," he said. "[But] it's going to be a whole lot harder now [to buy a home]."

The overall assessment value of Vancouver area properties jumped 25.8 per cent to almost $156 billion from a year ago, BC Assessment reported Tuesday. The 2007 assessment figures are based on property values as of July 1, 2006.

Downtown condominiums rose an average of 21 per cent to $418,000 from July 1, 2005, while condominiums in the Coal Harbour area showed the biggest jump in the city, up an average 37 per cent to $1.5 million, according to real estate analysis firm Landcor Data Corp.

Hildebrandt said he bought his 500-square-foot condominium from a friend for about $135,000 three years ago. According to the latest assessment, its value has risen more than 75 per cent since then.

"It's good news because the resale value will be higher," he said.

He said he's a little concerned what a higher value might mean for his property taxes, as municipalities set tax rates based on the annual assessments. But he said he doesn't expect they will change much.

When there are large assessment increases, municipal governments typically reduce rates by the average increase for each property class.

The rise in Vancouver's property value indicates a healthy market, Hildebrandt said. "If it went down, then we should worry."

Landcor data showed property values rose throughout Vancouver, but the pace of growth differed depending on the neighbourhood and the type of home.

- Single-family homes in the West End gained the least, up an average 13 per cent to $861,000. The average value of condominiums in the same area rose to $443,000, up nearly 22 per cent.

- In Shaughnessy, where properties were given the highest average value, a single family home was $1.9 million, up 21 per cent.

- One of the lowest-valued neighbourhoods was Grandview, where the average single-family home was nearly $560,000, up 29 per cent. Condominiums in the area averaged $226,800, an increase of 32.7 per cent.

The rise in assessment values should not come as a huge surprise to homeowners, as it reflects higher land costs and construction costs, said Vancouver realtor Grace Kwok, of Anson Realty.

"It's reality," Kwok said. "There's nothing one can do. The value isn't going to go back to what it was years ago."

She said Vancouver was due for a surge in real estate prices, since prices were relatively flat during the late 1990s.

Until 2001, "the market has been has been quite steady and stagnant," she said, adding the increase in recent years has been fueled by anticipation for the 2010 Olympics.

West Vancouver resident Bharat Anand said he's looking to purchase an investment property in Coal Harbour or Yaletown, as people from all over the world start to eye Vancouver as a destination.

Despite the increase in prices, real estate in the city is still relatively inexpensive compared to cities such as London, New York and San Francisco. That is luring international investors, he said.

Besides, Anand added: "It's a lot better than leaving your money in the bank."

But many said property in the city is getting too expensive, especially for first-time buyers.

Cordelia Williams, 29, said she is renting an apartment for $850 a month in Vancouver's West End because she can't get a mortgage with monthly rates that low. "I can't afford to own," she said.

"And may never be able to," added her friend, Leigh Johnstone, 29, who noted that she's in the same situation.

Williams said she hopes prices will fall after the Olympics, so she may finally be able to buy a home.

Darren Roberts, 30, said he purchased his first home a year and a half ago in White Rock, since the apartments in Vancouver were out of his price range.

"I didn't even bother looking here because I knew I wouldn't be able to [afford it]," he said.

Roberts said he hasn't yet received his latest assessment notice, but knows the value of his one-bedroom apartment has gone up. He purchased his home for $160,000, and other apartments in his building are now selling for $230,000, he said.

"It was more than I could afford, but in the end it's turned out to be such a good move," he said.

(prepared by Wendy Leung/Vancouver Sun)