People around the Okanagan are now receiving their BC Assessment for their properties.
Realtor Lyndi Chuickshank says that assessment values are usually expected to increase when market values increase and it’s important to understand the difference between the two.
“What’s really important for a consumer to understand is the difference between an assessed value and a market value,” said Chuickshank.
In markets like the Okanagan, people are seeing a market value that is greater than the assessed value, but in a declining market, the assessed value is usually higher. This happened in some place in 2008-09.
“Sometimes we don’t see any increase, some years we may see a decrease,” said Chuickshank. “It’s hard to say what an average would be because it’s really market-dependent.”
Right now, many different factors are being included in what is driving prices up.
“I believe the reason we saw an increase in demand certainly came from an increase in the number of people looking to live differently,” said Chuickshank. “We know based on our tracking of where our purchasers came from over the last year. Many people made life choices to move to the Interior of B.C., the Okanagan specifically. Quality of life for many people is believed to be better when living in smaller communities.”
Because of the pandemic, when people started to have the option to work from home, people decided to move to places better suited for them while being able to keep the same job.
“Vancouver is a main theatre to where people come from for the Interior. When the prices rise there, certainly we do tend to see them rise here,” said Chuickshank. “I think the overlying factor is the number of people that looked to make a move into the Okanagan, that was an unprecedented number for us.”
The difference between assessed value and market value is local governments use the assessed value to determine people’s taxes, because people are taxed on the assessed value while market value has to do with demand.
Pricing doesn’t just affect the housing market when it comes to purchasing, but for the rental market as well.
“The demand for rental properties through the Okanagan has historically been extremely high,” said Chuickshank. “We tend to see very low inventory or availability for rental properties, and that’s an ongoing challenge all local governments are facing, not just in the Kelowna area. What we need to see is more rental housing being built and becoming available for those not able or not choosing to purchase.”
One factor of the BC Assessments is that they come out at the beginning of the year, but properties are valued and assessed based on July 1st from the previous year. When the newest numbers that have come out show increases across the Okanagan, Chuickshank said that housing prices actually started to level off in the second half of 2022, which isn’t documented in the assessment. She said it is because we’re starting to see housing demand decrease and housing availability increase.
“When those assessments were done, we were still seeing increases in prices happening, where shortly thereafter, we started to see a softening in the market and prices starting to come down a little,” said Chuickshank.
She added that this trend is expected to continue across the Okanagan.
“We’re expecting to see the leveling off continue,” said Chuickshank. “I think the number of buyers that we still see in the market, that number is still strong. It has leveled off from what was a historic high but were still sitting in a relatively healthy market. The plus is we’ve started to see more inventory on the market and I believe we’ll continue to do that. One of the challenges is when inventory levels are so tight, what we say was people being very resistant to even putting their home on the market because they were concerned they wouldn’t be able to find a home to go to. We’re expecting the affordable of home purchases will continue to be a predominant and determining factor for many people over the months to come because the affordable of a home has changed dramatically due to the increasing in interest rates.”