By now you have likely heard assessed values of detached homes in Sullivan, Panorama, South Surrey and surrounding areas have jumped 10-17% this year. A small portion of property owners with homes worth over 1.1 million will lose some or all of their property grant.
Assessed values - based on a hypothetical scale as of July 1, 2015 - are used for the purpose of taxation but can also be used as a value scale for realtors and a reflection of general market conditions for sellers.
Simply speaking, low supply and high demand are responsible for this marked increase in our assessed values. Demand for detached homes has been intense for a couple years now and overall fewer new homes are being built as municipalities call for higher density planning. Similarly, Surreys land availability continues to follow a downward trajectory due to our location; closed in on all sides by the lower mainland, the fraser valley and the US border.
Contributing to the dramatic rise in real estate values is offshore buyer demand but only a small portion of that money is coming into the Surrey and South Surrey market; properties in Vancouver, Burnaby, Richmond and the North Shore are seeing the lions share. The current conditions in China mixed with our low dollar will likely cause more Chinese people to move their money to Canada and into our housing markets.
But Real estate markets follow peaks and valleys and this upward pricing trend will come to an end eventually. Likely in the next few years. Although current interest rates allow buyers to borrow large sums of money with relatively low mortgage payments we are all dependant on a strong economy and employment to be able to make those payments. Falling oil prices, job losses and turmoil in the stock markets keep our economic outlook unclear.
So despite the hype around skyrocketing home prices and property assessments we feel the real story is the Canadian economy as many of the factors noted above helped move us into the global recession of 2008 ... cash remains king.