Brent Jang, The Globe and Mail, Feb. 24, 2017
Vancouver is edging close to having 100 per cent of its detached houses assessed at $1-million or more.
A new study by Andy Yan, director of Simon Fraser University’s City Program, shows that 99.7 per cent of single-family detached properties in the city of Vancouver had an assessed value of at least $1-million last July, compared with 91 per cent in mid-2015 and 65 per cent in mid-2014.
In July, 2005, only 11 per cent of detached homes in Vancouver were assessed at $1-million or more. Mr. Yan said scoring almost 100-per-cent membership in the $1-million club is a dubious achievement during Vancouver’s affordability crisis.
Assessed values in the city soared 30 per cent on average from mid-2015 to mid-2016. Neighbourhoods with hefty average gains include: Strathcona (48 per cent); Dunbar-Southlands (38 per cent); Grandview-Woodland (36 per cent); South Cambie (36 per cent); Marpole (35 per cent); Mount Pleasant (35 per cent); West End (35 per cent); Arbutus Ridge (33 per cent); Kerrisdale (33 per cent); Riley Park (32 per cent); and West Point Grey (32 per cent).
Shaughnessy, a wealthy neighbourhood with mansions on large lots, saw its average assessed value jump 26 per cent during the one-year period.
“There is what people want, what they can afford and what is good for the collective. My point is that $1-million is so far beyond local median incomes in the city of Vancouver,” said Mr. Yan, who surveyed data for nearly 67,000 Vancouver detached homes valued by BC Assessment, a provincial Crown corporation.
Even with Vancouver’s real estate market cooling off over the past six months, housing remains expensive. Sales volume began declining last April, and the slowdown continued after the B.C. government implemented a 15-per-cent tax on foreign home buyers in August.
The $1-million geographic dividing line between the west side and east side, which used to be along Ontario Street, has shifted eastward over the years. That line has now disappeared on Mr. Yan’s Vancouver map.
Million-dollar properties have been commonplace for more than a decade on city’s west side. The pricey pattern spread deep into parts of the east side by 2012. Last year, the land value alone on standard lots topped $1-million on the east side, even along busy roads such as Nanaimo Street.
“It’s rare to see any detached house for sale under $1-million in Vancouver,” said Farris Kapani, a real estate agent at Coldwell Banker Prestige Realty in Vancouver. “And if you do see one, it’s usually either on a small lot or on busy street or a tear-down.”
One client recently asked Mr. Kapani to find a detached home that might sell for roughly $900,000.
“I replied, ‘Good luck finding something in Vancouver.’ Buyers have to look east of the city, and that usually means Surrey,” he said.
According to a study earlier this month by Landcor Data Corp., nearly 38 per cent of detached houses in the sprawling suburb of Surrey had assessed values of $1-million or higher last July, compared with 12 per cent in the same month of 2015.
Landcor examined some 75,000 detached properties and found roughly 200 addresses within Vancouver’s city limits were assessed for less than $1-million last July. Both Mr. Yan and Landcor say 99.7 per cent of the detached houses in their respective studies had assessed values of at least $1-million last summer.
The average price for detached homes sold on the Multiple Listing Service within Vancouver in 2016 reached a record high of $2.77-million last year, compared with $2.27-million in 2015, according to MLS data.
Chris Lehane, Airbnb’s head of global policy and public affairs, said many homeowners in expensive markets such as Vancouver and Toronto garner rental income from a portion of their houses to help make mortgage payments.
“We fundamentally believe that we are a platform for the middle class,” he said in a recent interview. “We know that most of our folks are really using their primary homes and generating supplemental income.”
Property values have also surged in the industrial and commercial sectors in Vancouver.
The assessment for the Molson Coors brewery site on Burrard Street climbed to $150.8-million in mid-2016, compared with $43.7-million in mid-2015. Developer Concord Pacific bought the site last year, and the property is still categorized as industrial. Molson Coors plans to shut down the now-leased Burrard Street plant and open a new brewery in Chilliwack by early 2019.