Property Assessment Deflation Hits Parts of British Columbia

Originally published by Times Colonist on January 8, 2018 Read the original article.

Signs of weakness persist for the housing market in British Columbia, Canada.

Let’s first take you back to this chart and commentary from the October 2017 Elliott Wave Financial Forecast:

The chart shows that from July to August, the average price of a detached, single-family home in Vancouver declined from $1.33 million to $1.11 million. A reader notes that Vancouver’s sales plunge comes as British Columbia has slapped a tax on foreign purchases of residential real estate. This new tax fits perfectly with EWFF’s assertion last month that government action is not outside the realm of the Wave Principle. In fact, government tends to embrace a prevailing trend as it concludes. In this case, the British Columbia government is trying to make money off real estate’s rally, just as prices are peaking. In classic fashion, the arrow on the chart shows how the 15% tax on foreign purchases hit right at the end of an impulse move that dates back to the 1970s. British Columbia is four decades late!

Today, deflation has hit property assessments in parts of British Columbia.

Read this excerpt from a Jan. 8, 2018 article in the Times Colonist, a newspaper in Victoria, British Columbia:

In a province of mostly rising property assessments, the one-time LNG boom town of Kitimat in British Columbia’s north west is in its third year of assessment deflation as plans to develop natural-gas liquefaction plants in the region remain on hold.

Fort St. John, Fort Nelson, Terrace and Tumbler Ridge are all among the northern communities to see property assessments slide by about one to almost five per cent, according to data released by B.C. Assessment last week.

Kitimat, however, the terminus for two major LNG proposals awaiting investment decisions from their backers, saw residential property assessments drop in the range of 20 per cent, for 2018, according to B.C. Assessment.

The average residential assessment in Kitimat was $233,000 for the 2018 property roll, down 16 per cent from 2017 and 30 per cent from an average of $331,000 in 2015.

That is a contrast from 2014 when the community posted a province-leading 27-per-cent increase in assessments, but that was close to the market’s peak on the speculation of immanent LNG developments, said area realtor Sheila Love.

“Then in 2016, it just died as soon as all the projects were put on hold,” said Love, managing broker for Re/Max Kitimat Realty and Re/Max Coast Realty in Kitimat and Terrace. “It was like somebody turned the tap off.”

Gone are the days when out-of-town speculators were buying up properties sight unseen and driving rents up, said Love.

“Kitimat had a bit of a speculative bubble around LNG projects, or prospective projects,” said Cameron Muir, the B.C. Real Estate Association’s chief economist. “Now, we’ve seen prices come down.”

You can read the entire article by following the link below:

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