Facts & Figures For The Victoria, Sidney and Sooke Real Estate Area 

• Homes Pay Top Dividends
  
  
• Assessors Ride The Real Estate Rocket
  
  
• Big Assessment Hike Needn’t Mean Higher Taxes
  
  
• Power Point Graphs

Taken From the Times Colonist, Victoria – June 22 2004 – by Eric Beauchesne

“Homes Pay Top Dividends”

Ottawa – A home has been a better investment than the stock market, over the past five years and over the past ten as well, according to a report by a major real estate firm.  The return on a $20,000 down payment on a home would have been greater than the return in the stock market over the past five years in all Canadian cities surveyed and, over the past ten years, in most of those cities, Century 21 says in a report.
It compares those returns with the five year 27 percent return, and 10 year 137 percent return in the benchmark S & P/TSX index.
For example, homebuyers in Ottawa would have earned a five-year return of 512 percent on their $20,000 investment and a ten-year return of 287 percent, while a homebuyer in Peterborough, would have earned a five year return of 357 percent and a ten year return of 431 percent.
”It was harder to make the large gain in bigger and high priced markets because of the cost to service the larger mortgages,” it said. ”Toronto, for example, posted the second lowest return of any market in the country, and in Vancouver, which was still suffering from a recession through the mid ‘90’s, a highly indebted homeowner might actually have lost money in the last ten years.”
However, even for homebuyers in large cities, there has been a rebound in the value of their investments in the last five years, it said.
In all but the most extreme circumstances, home ownership has provided a surprisingly high return during that period, said Century 21 Canada president Donald Lawby.
Its survey of the 20 most populous Canadian markets looked at house investment in two ways, one as the straight percentage increases in house prices over the two periods, and the other as the return on a $20,000 down payment on average priced homes.
Someone who purchased a home outright five years ago and sold it this year, would have enjoyed a return that ranged from a low of 46 percent in Greater Vancouver to almost 146 percent in Halifax-Dartmouth.
But most people buy their homes with a down payment, leveraging their investment by borrowing money from the Bank, Lawby said.  So, when they sell the house they earn a return on the full sale price of the house.
On that basis, and taking into account the interest expense of carrying a mortgage, the big percentage winners are in Canada’s smaller housing markets, it said.

In Canada’s highest priced cities, outright house price increases were still substantial, but the cost that big city buyers paid to service larger mortgages made it hard to match returns in smaller markets.
Big profits are still available in the big markets, especially if someone can afford to invest without going too deeply in debt, Lawby said.
Five-year returns, followed by ten year returns, on a $20,000 investment in a home for the markets surveyed were: Toronto 126 percent and 100 percent, Montreal 227 and 185, Calgary 138 and 220,  Edmonton 299 and 243, Greater Vancouver 50 and minus 13,  Charlottetown 176 and 221,  Halifax-Dartmouth 292 and 436,  Okanagan-Mainline, including Kelowna and Vernon 203 and 110, Kingston and area 169 and 148,  London and St. Thomas 139 and 47,  Missisauga 127 and 95,  Moncton 176 and 187,  Ottawa 512 and 287,  Peterborough 357 and 431,  Regina 117 and 213,  Saskatoon 94 and 295,  Saint John 161 and 249,  St. John’s 255 and 285, and  Windsor-Essex 86 and 292.

Assessments are the estimate of a property’s market value as of July 1, 2004 – which was right in the middle of the latest buying boom when homes were selling within hours of being listed and multiple offers and bidding ward were common.
“The real estate market creates property value” says Hawkins.
It depends on where you live.
Some Oak Bay residents will see a 28 percent increase.  Residents of James Bay, Sooke and Triangle Mountain in Colwood will see increases of 20 percent on their 2005 assessments.
Residents at Ten Mile Point in Saanich assessed at $577,100 in 2004 will see the value of their home shoot to $705,200.  Waterfront property in North Saanich will pad assessed value by $147,500, from $706,000 in 2004 to a whopping $853,500.  Areas in Metchosin were up 19 percent while some residents in Sidney, the Victoria Jubilee area and Royal Oak an Broadmead in Saanich will see property values escalate 18 percent. 
If your property assessment increased by 20 percent, it doesn’t mean an equal increase in taxes.  Mayors say municipal councils and staff will look at assessed values, then establish their mill rate, which determines property taxes, according to budget needs.  Depending on budget needs a municipality may even be in a position to lower its mill rate.
“The city really has no control over assessments, but in the end assessments will be used to determine the mill rate” said Victoria Mayor Alan Lowe.
Lowe said preliminary work by council’s budget committee is showing taxation may have to rise by around four to five percent.
In Saanich, Mayor Frank Leonard said work to set the budget has not yet begun, but the municipality has done well in keeping costs down so he doubts there will be a need for an increase.
The B.C. Assessment Authority surveyed more than 130,000 homes in the capital region and more than 1.75 million across British Columbia – a 1.64 percent increase from last year.  Total assessed value for B.C. was up 17 percent in 2005 to $581 billion.
In Greater Victoria, teams of assessors break communities into groups of 100 to 2,000 homes.  Land value and location – busy street or cul-de-sac are factors and so is the size of specific buildings and some special features, says Hawkins.
Greater Victoria set a record acreage prices six times during 2004, but those amounts were often skewed by million dollar plus sales of waterfront properties and homes in affluent areas such as North Saanich and Oak Bay.

The median price is a more accurate picture, say local real estate agents.  That price is derived by taking the total number of sales and finding the price of the home right in the middle.
For December, the median price of a single family home was $360,000 on 569 sales, substantially lower than the average selling price of $427,842.
For 2004, 4,285 homes were sold in the capital region for a collective $1.65 billion and an average selling price of $386,045.  The Victoria Real Estate Board did not provide median prices for its 2004 totals.  Saanich East proved both popular and affordable with 944 sales, followed by Vic West/Victoria at 610 and Saanich West and Langford with 434 sales each.
Oak Bay had 265 sales last year with an average selling price of $605,993 followed by North Saanich, which had 175 sales and an average price of $605,157.  There were 245 sales in the Gulf Islands, averaging $447,249.
In perspective, the average price for a single family home in 1994 was just over $250,000; 1984 $100,000 and 1973 under $50,000.
Condominium sales also rose 18% to a $216,300 average while prices for townhouses leapt 21 percent in 2004 to $298,872.
Escalating prices – and corresponding high assessments – aren’t about to end any time soon.
Kevin Sing of DFH Real Estate Ltd. said Victoria is a destination popular with Canadians in colder climes, Americans with a higher currency and Europeans who find waterfront and view properties extremely undervalued.
While low interest rates have been the main driver in this real estate boom, modest increases forecast for the third and fourth quarters aren’t going to break the boom, but it will start to level off, added Sing.
The biggest challenge for real estate agents is still supply.  There were 2,022 homes and other properties available for sale in December – about 30 percent more than a year ago – and there are some new subdivisions under construction and others being approved but it isn’t enough to immediately relieve price pressures, say real estate agents. 

Power Point Graphs 

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