In yet the latest reminder of the inevitable Canadian real estate apocalypse, B.C. Assessment announced this week that home prices in Vancouver rose between 10-25% during 2011. In the family-oriented West Side of Vancouver, prices “skyrocketed” (their words) as much as 20-40%.
In order to lessen the blow to existing homeowners, B.C. Assessment sent what it calls “extreme letters” to approx. 1500 households, letting them know in advance (as a matter of courtesy) that their property taxes will be increasing dramatically.
Since 2002, Vancouver real estate fairy tales have become so commonplace that many people now actually believe that their run-down house on an average size lot is worth $1.3 million dollars (1.26 million USD).
In the East Side of Vancouver (the city’s equivalent to New Jersey), an average single family home is now worth more than $800,000.
In a brilliant understatement earlier this week, the deputy assessor for the Vancouver Sea to Sky region stated: “It’s been a really strong market for Vancouver, a good one –a robust one."
Apparently, BC Assessment sees no downside risk to real estate prices rising at rates up to 37% faster than wages.
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"In our view, the housing market is one of the most vulnerable sectors to this weakening economic environment, showing classic signs of overvaluation, speculation and oversupply. We are not calling for an all-out rout in the market, but caution is now decidedly warranted."
Bank of America Merrill Lynch, regarding Canadian real estate, December 2011.
Bank of America Merrill Lynch, regarding Canadian real estate, December 2011.
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