We knew that home prices had boomed in the last year. We’ve written about it on a number of occasions.
But our jaws at the Citizen still dropped when we took a gander at this year’s property assessments for the Cowichan Valley.
If you haven’t seen your assessment yet, be prepared to have your mind blown.
People can expect to see that their assessments have risen anywhere from 35 per cent to more than 59 per cent (waterfront in Youbou has gone crazy).
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Even what were once more affordable areas, such as Lake Cowichan, and Crofton are quickly rising out of reach of many, particularly first time home buyers.
It is bad news for those just trying to get into the market (who aren’t independently wealthy). You see, if you don’t have something to sell to earn you a big chunk of cash to put down, chances are that saving enough for a downpayment, when the price tag is so astronomical, will be tough. Especially since salaries have not risen to match. This also creates problems for people needing to get a mortgage (which is most home buyers). What your income will allow you to borrow will very likely not be enough at today’s home prices.
Modest homes that even last year were valued in the $300,000 range will now set you back more than half a million dollars. And that’s just the assessed value. Often a home will actually sell for a lot more than that. Especially when there’s as little inventory as there is out there now.
While condos and townhouses haven’t seen quite as much of an increase in assessed value, they haven’t stagnated either, with values on the Island ranging from 15 to 27 per cent increase. Which only looks more reasonable when put side by side with single family homes.
Homeowners can revel in the knowledge that they own a really, really valuable asset, however the huge jump in assessment values will also create problems for some come tax time.
While it is not a direct line between your property’s assessed value and how much you will end up paying in property taxes (and the fact that everyone has gone up at once should cushion the blow), chances are when your assessment goes up, so does your bill. Thus a skyrocketing in assessments like we have seen in 2021 can be really hard on people on fixed incomes. You can plan for some degree of appreciation in the value of your property and that you’ll likely face an increase of some kind in property taxes as the years pass, but there is little way to plan for something like we are seeing now. Municipalities and regional districts will have to keep this at the forefront of their minds when they do their budgeting this year.