Residential real estate assessments in Nelson are expected to go over 10 per cent when the roll comes due in 2019, according to a BC Assessment official, marking an almost 30 per cent total rise in residential assessments over the last three years,
Raimish Shah, deputy assessor of BC Assessment, said although there isn’t a lot on the shelf in the Heritage city housing market homes are moving quickly and the prices fetched for the structures are at or above asking price, driving up assessments.
“This year I expect it will be increasing again,” he said about the average house price in Nelson climbing from $300,000 in 2013 to over $400,000 in 2018. “And what you get for $300,000 now is quite a bit different than you would get for $300,000 a few years ago.”
The 2019 roll will likely be over 10 per cent, Shah suggested, and that would be across the board in the city.
But that doesn’t mean homeowners will be facing a 10 per cent higher tax bill. If a home’s value increases more than the average increase, there might only be a slight increase in the property taxes, Shah explained.
In addition to the average Nelson home becoming more unaffordable for the average Nelson family, another disturbing fact is the sizable drop in homes being offered for sale in the city, said Shah.
What has happened in Nelson over the last number of years is a significant downward trend of listings, he explained, and that is unlikely to change in the future.
Currently there are 34 single family homes listed for sale in the city, Shah noted, and that number has been steady. Earlier this year the housing stock dropped to 11 in January.
“In a town of 10,000 people with only 11 homes for sale that leads to a decrease in (affordability),” he said.
And there are few months of inventory left in Nelson, he added, with homes selling quickly — within a few weeks often — when they are listed.
“It’s a clear indication there is less than five months of inventory in Nelson,” he said.
A decrease in the number of listings corresponds to an increase in the area in pricing, resulting in multiple offers on the same house because there isn’t much else available.
“People will try to outbid each other for the house, and have offers with things like no subjects,” Shah said. ”It’s kind of a dramatic change from 2013 to now.”
In 2013 there were nearly 120 homes on the active listing.
At one time house prices used to vary according to neighbourhood in Nelson but not anymore, said Shah. Neighbourhoods like Rosemont and Fairview are now on equal footing with Uphill in property value, he explained.
“Buyers will pay the same for a home (in Nelson) no matter where it is,” Shah said. “People will just buy anything they can get. Where it is located in town isn’t as important as the fact they don’t have to drive 30 minutes to get to work each day.”
Outside money drives the market
Shah was asked about what the lure of Nelson could be.
In Nelson people can escape the extremely high real estate prices of the Lower Mainland, he said, and buy a house for $400,000, something a two-income family can afford.
“Depending on what you have in terms of a down payment and job opportunities, it is still possible to buy a home,” he said. “If you want to live rural and spend less money, you can do so and there are opportunities to do so in neighbouring communities.
“From the perspective of anyone coming from somewhere else in the province it is not an incredibly expensive place, although it is increasing in … price over the last few years.”
Nelson is geographically constrained by mountains and the lake, so there is not a huge amount of undeveloped land in the city. So, eventually, the city will be looking at more density, said Shah, and more properties that have secondary suites on them.
On the ground
The total property classes for any given municipality is nine, but Nelson only has property in six of them.
The largest property class is residential in Nelson, with a total property value of $1,570,459,000, with business and other the next largest value at $255,886,000.
The third largest class — utilities — is valued at $107,762,000 while light industry is $1,684,000 and recreational/non-profit is $2,262,000. Supportive housing is $8.
The assessment roll reflects the annual market value of all properties in B.C., and represents over two million properties with a total value of $1.86 trillion, raising over $7.5 billion each year to fund school and local services.
— Source: BC Assessment