Those receiving assessment notices from the B.C. Assessment Authority, which show property prices continuing to rise, are asking a lot of questions. The assessments, based on market conditions on July 1, 2022, are the opposite of the actual downward trend in the real estate market.
The movement down was just beginning in July, but has continued as the costs of borrowing continue to rise sharply. Even with a decline in prices, current interest rates mean few can afford to buy.
This, not rising assessments, is the real problem. Many people who want to buy a home cannot afford to do so. This affects far more than housing prices. It has a direct effect on rents. Inflationary prices for basics such as groceries and day-to-day necessities are also keeping people from even thinking about buying, as they try to stretch finite dollars.
The Bank of Canada and many federal politicians say high interest rates are a short-term necessity to keep inflation down. What such voices seem to ignore is the real effect on people.
It seems that local politicians also ignore the real effect on people. Whether or not there is a massive tax increase to pay for transition to Surrey Police, we all know that taxes in Surrey will be going up significantly. There is no real effort being made to control costs, and municipalities are also hit with inflation.
Delta and White Rock residents will also face much higher taxes – at a time when many can least afford them.
So who is looking out for the beleaguered taxpayer? No one, it seems. The words from The Beatles’ song Taxman come to mind, “it’s one for you, 19 for me.” The song’s lyrics go on to say “Should five per cent appear too small,
Be thankful I don’t take it all, ‘Cause I’m the taxman.”
With all this in the background, it appears that 2023 will be a year of tough decisions for families, business owners, potential home buyers and sellers, and shoppers. They are asking questions such as “What can I stop spending money on, or at least reduce my spending on?” and “Do we need to move to an area of Canada where housing costs are substantially lower?”
Government freezes on price increases, such as ICBC and BC Hydro, do help a bit. The province deserves credit for taking a small step in that direction. But no such freeze is likely from local governments, and taxes alone are not the only higher cost people are facing in 2023.
The simple fact is this: housing costs in this area of the world are outrageous, and coupled with higher interest rates and other inflationary pressures, a breaking point is drawing near.
The fallout will be grim: There will be huge social costs, and upheaval on a scale that has only occurred rarely before.
Let’s see what local politicians have to say about that. Do not hold your breath waiting.
Frank Bucholtz writes twice a month for Black Press Media.