Real estate slowdown affects industry, assessments

Businesses that service the real estate industry are a major contributor to Greater Victoria’s economy. However, rising interest rates have slowed sales. Throw in the traditional quiet period around the holidays and fewer properties are changing hands. Only 384 sales were recorded in the region for November, down from 653 last November.
 
There are also concerns about potential unintended consequences of recent changes to the provincial Strata Property Act.
 
“It is an open question whether these changes will bring any additional rental stock to the market — with BC’s complex Residential Tenancy Act not all homeowners of vacant strata homes have a desire to become landlords and current interest rates are less attractive to investors who may want to purchase strata rental properties,” Victoria Real Estate Board President President Dinnie-Smyth said in a news release. “It is also possible that these measures will contribute further to eroding housing affordability as older stratas with rental restrictions were generally valued lower than their rentable counterparts.”
 
Slower sales have also contributed to a slight dip in market values over the last few months. That could mean some property assessments — being sent out soon to homeowners from BC Assessment — will be higher than current market value.
 
“I want to emphasize that assessments are based on July 1 values of this year, meaning that when similar properties were sold up to and around July 1, those market value sales are used to calculate your assessed value,” Assessor Bryan Mura said in a news release. “An increase in assessment value does not, however, necessarily result in an increase in property taxes. Taxes are typically only affected if you are above the average value change for your community.”