This year, Squamish residents are seeing a sizable hike in their property values, with the average increases for single-family homes leaping by 35%.
Strata residences, such as townhomes, leapt by a similarly large margin of 29%.
This makes Squamish one of the municipalities with the biggest increases in valuations from a percentage standpoint.
These are key highlights coming from the latest round of valuations by BC Assessment, which were announced on Jan. 4.
The average price of a detached single-family home in Squamish leapt to $1.38 million, up from about $1.02 million last assessment year.
For strata properties, this was a jump to an average of $724,000, up from $560,000.
This year’s values are government estimates of property prices as of July 1, 2021.
Squamish is not alone in the trend for increasing property values.
Provincewide, properties altogether increased to a total of about $2.44 trillion, which is a roughly 22% gain from last year’s assessment.
“The widely reported heightened demand among homebuyers during the COVID-19 pandemic is reflected in the upward movement of property values across the province, including 10% to 30% increases throughout the Lower Mainland. City of Vancouver condos, however, are on the lower end of the changes, generally with single-digit increases, whereas homes in the Fraser Valley suburbs are changing higher compared to most of Metro Vancouver,” said BC Assessment deputy assessor Bryan Murao in a news release.
“Similarly, commercial and industrial properties across the province continue to show signs of recovery,” adds Murao.
Many homeowners will no doubt be concerned about how this will affect their property taxes.
However, UBC professor Tsur Somerville told The Squamish Chief what matters is not so much an increase in value, but how much your home’s value increases relative to the rest of the community.
“The tax bill is not driven by your assessed value — it’s driven by your assessed value compared to everyone else’s,” said Somerville.
“So, if everyone’s assessed value goes up by the same percentage, then you’ll all share the same piece of the increase in what the municipality spends.”
When it comes to market trends, Squamish properties appear to have had a faster price appreciation in relation to much of the Lower Mainland as a whole, Somerville said.
“Probably the place that stands out the most is the condo price appreciation in Squamish was significantly higher than what it was in the Lower Mainland,” he said.
“If you look at the Lower Mainland, detached increased the most, then townhouses, then condos a lot more, but, in Squamish, you saw really sort of large price increases even in apartments over this year compared to the Lower Mainland.”
He noted that there was also a particular price point that was especially in demand.
“What’s interesting is the larger price increases, for the most part, are for the less expensive market segments,” said Somerville. “So it really seems like [for] people who are buying a condo, the demand was really highest at the very lowest price entry level.”
The data seems to show that during COVID, people tended to buy property away from urban centres like downtown Vancouver.
He noted that public space was devalued because of the shutdowns, and private space started to become more desirable.
“I think these things tend to favour a place like Squamish,” said Somerville.
“Squamish amenities are outdoor amenities, which are the least impacted by COVID.”
Restaurants, clubs and cultural events and centres were hard hit, but the outdoor recreation has continued relatively unscathed, he said, making the town an ideal place to live during the pandemic.
However, with increased demand comes rising prices.
Increasing the supply of housing will help the prices come down, Somerville said, but it depends on the context of how widespread this happens.
Alone, if a small town like Squamish doubles its housing supply, it likely won’t fix the problem.
But if municipalities throughout the Lower Mainland met that same goal, then the change would be significant, he said.
“This is not rocket science. But that means you have to either get everyone on board, saying, ‘Yes, we want more density in our neighbourhood,’ or, basically saying, ‘Hi, you gotta take on density whether you like it or not.’ It doesn’t work as effectively if only some places do it.”
Another UBC professor, Thomas Davidoff, said that the results were a surprise to him, but it may be showing that the federal government’s support has been working.
“If you told me the pandemic [would] drag for two years, I would’ve said it would be terrible for the economy, and, therefore, terrible for house prices,” said Davidoff.
“People are going to lose their houses. They’re going to default on their mortgage loans.”
Instead, people have been relatively sheltered from that worst-case scenario. There haven’t been a massive influx of consumer bankruptcies, indicating that federal aid is working, he said.
This pushes up housing prices, but it’s positive that people aren’t suffering the extreme economic hardship that they could be without any help.
Low prime interest rates imposed by the government have made it easier to get mortgages, thus increasing prices.
However, this likely won’t affect the affordability for the most vulnerable of residents.
“Low rates make buying harder, but not renting,” said Davidoff. “You know, when you think about who we are most concerned about in society, it’s people who have very little prospect of ever owning.”
The skyrocketing prices of single-family homes throughout the province and in Squamish also caught Davidoff’s eye.
He said this casts doubt on the future of the single-family home.
“I think we’re going to look back at single-family homes the way we look back at insane asylums, incarceration rates in the U.S., long term care facilities where people are treated poorly, as one of the things where we really are like, ‘What the hell were people thinking?’ I mean the sprawl; the excess commuting that happens when people take up too much land; being car-dependent — of course, things should be built more densely,” said Davidoff. “However, nobody needs to ban single-family homes, but the market will ban them by deciding they prefer to build townhome[s]...Squamish is getting there, but, in Vancouver, probably 95% or more of first-time buyers can’t afford a detached home, so why would you zone 70% of the land for that use?”
