Like a Christmas present that arrives late, this week homeowners across the Capital Region and B.C. are eagerly tearing open their annual property value assessment from B.C. Assessment.
The notices, more than 144,000 in Greater Victoria, are vital for many reasons. Most people have a large portion of their personal wealth wrapped up in their homes and properties, and most hope for a steady year-after-year increase in value.
Overall property values help guide municipalities with budgeting and tax rates. An increase in property value doesn’t automatically translate into a tax hike, but if property values stay flat or decline, municipalities will certainly face the hard choices of cutting services, hiking taxes or both.
That appears to be the case this time around. Most people will find their properties have decreased in value or are about the same as last year. B.C. Assessment calls it a market that is “stabilizing,” rather than deflating.
It’s not a big surprise property values are flat lining or declining. Across Greater Victoria, real estate sales in 2012 slowed and prices remained stagnant for single family homes, and condos saw overall price decreases, an unheard of phenomenon in Victoria five or six years ago.
Greater Victoria is in a good position with respect to other parts of B.C. and Canada – it’s employment base is relatively diverse across the provincial and federal governments and the private sector. But the flat property values is a barometer and reflection of a broader lagging economy and a public worried about its fiscal future.
Cutbacks and austerity at all levels of government have been the norm since the recession of 2008, and 2013 won’t be an exception. Local municipal councils likely weren’t expecting large increases in property values, and will budget with that in mind.
Most local governments will want to keep tax hikes low, and that will likely mean job losses and service cuts. Flat growth might be the watchwords of 2013.