BC Assessment just released this year’s property tax assessments, announcing New Westminster’s tax roll will be increasing from $12.352 billion to $13.070 billion. I’ve operated under the belief that one can expect a 5% yearly property value increase over the long term in the Lower Mainland real estate market. However, the increase in this year’s tax roll suggests that an average increase of 5.8% was seen in New West property values from July 1, 2010, to July 1, 2011. I believe this is probably correct on an average basis. But is it possible that the low assessments are too low, and the high assessments are too high?
If you were to review this report released by BC Assessment, you would find the following information on the assessments: (column on the right is this years average value)
As you can see, the biggest jumps are in: Queens Park at + 15.05%, Queensborough at + 14.59%, and low rise 2 bed condos at 13.9%. While the only area losing value was Sapperton at – .31%.
I am not surprised by large increases in the value of properties in Queensborough or 2 bed low rise condos. Queensborough has seen great improvements in recent years with the completion of Port Royal, new parks and rec facilities, boardwalk, Lowes, and the Queensborough Landing. The increase in 2 bed low rise condos is no surprise either – as a shift in demographics has set in; and the stock of such apartments has improved greatly. Complexes such as the Copperstone in Sapperton are desirable to buyers new to the market.
When it comes to Sapperton, I am a little surprised to see a decrease in value, because I see this being an attractive area for future gains. It is likely that the uncertainty of United Boulevard Exchange Project and the unfinished Brewery District hurt values over the course of the year.
But the real question is, is the average home in Queens Park really worth over $1 million?
There was 26 listings sold in Queens Park from July 1, 2010, through July 1 2011. Only 3 of those sales were of the million dollar variety, with $1.25 million being the highest sale. Here are the statistics straight from MLS:
Based on all these sales, the average price is well below $1 million. However, there was one sale in Queens Park that I believe is the sole reason for the increase, and that would be 216 St. Patricks Street:
This home went for an astounding $103,000 over asking price as a building lot. It is my educated guess that this is what BC Assessment is leaning on when it comes to land value in Queens Park. They will likely suggest that, because of this sale, land in Queens Park is worth approximately $103 per sq.ft. ($902,000 / 8712 sq.ft.), plus the value in the home.
However, this is a challenge because most homes in Queens Park are most likely not a knock-down. The highest and best value of a home in the area is most likely as is. Therefore, it can not be assumed that the value of 216 St. Patrick is reflected in the land value of other properties. If a house in Queens Park is not a knock-down, and it is also not a $1 million home, this should be a point used in any appeal to BC Assessment.
Do you think the average price of a home in Queens Park is worth over $1 million?
Hi Adam: this is an excellent analysis of what may have caused the excessive rise in assessed value in QP relative to the average. If the St. Patrick St. property anomaly is removed from the equation where would the percentage rise for QP really sit? Would it be on around the 5.8 percent average or higher or lower?