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BUCHOLTZ: Out-of-whack housing market hits home in Surrey

Property values continue to skyrocket in Surrey and across Lower Mainland

Real estate values in Surrey and White Rock continue to rise dramatically, as the overheated market keeps boiling.

BC Assessment Authority’s statements on property values (as of July 1, 2017) have been mailed and few saw their assessments decline. In many cases, assessments jumped dramatically.

Assessed values for North Surrey and Central Surrey apartment condos went up by breathtaking amounts – 33-40 per cent for most. Townhouses also went up significantly – about 25 per cent in North Surrey and 33 per cent in Central Surrey.

The much-higher values assigned to apartments and townhouses are not surprising. The reality is these are just about the only form of housing many people can afford. Tighter mortgage rules also have impacted the market.

A strong economy and limited supply of new units seems to put continual upward pressure on prices.

This affordability issue rings particularly true for people who are getting into the Lower Mainland property market for the first time, either because they are buying their first home or have moved from an area where prices are actually based on income and cost of living.

Among the latter is the new president of the BC Lions, Rick LeLacheur, who settled down to work in his Whalley office last week. One of his biggest surprises moving from Edmonton was just how much housing costs here.

Assessment increases do not necessarily mean property taxes will jump by the same percentages. Jumps in assessments are often accompanied by reductions in mill rates, to keep taxation fairly even. However, virtually all municipalities are boosting the overall property tax bill.

The affordability crisis doesn’t just affect home owners. Renters are vulnerable. Although the province has moved to eliminate some of the loopholes that landlords have used to raise rents, the actual supply of rental units is limited.

Surrey could have made that situation much worse, had it followed through on its plan to kick tenants out of suites in Clayton. To its credit, council realized putting more tenants out into a tight rental market would create more problems than it would solve.

The new NDP provincial government won several seats (two in Surrey, for sure) by promising a comprehensive strategy on housing affordability, something the previous BC Liberal government had only addressed piecemeal. Premier John Horgan has pledged to unveil a strategy next month.

Any strategy will have to be multi-pronged, because the issue isn’t simple. It involves all three levels of government, many different regulations, home ownership, rentals, homelessness, non-profit housing, banks, developers, contractors and real-estate professionals.

Housing is the biggest single cost that almost everyone faces, and it is a necessity – not a luxury.

Getting to the point where housing is both available and affordable, particularly with a limited supply of land, will not be easy.

The housing market is badly out of whack, if prices are compared with what most people actually make. The ship needs to start floating on a more even keel.

Frank Bucholtz writes Fridays for the Now-Leader.



edit@surreynowleader.com

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