While falling home prices may be good news for those trying to get into the real estate market, they\u2019re certainly not welcomed by the 63.7% Metro Vancouver adults who own their home.<\/p>\n
A study released May 21 found that in the past year, from April 2018 to April 2019, $89.2 billion has been wiped off the total value of residential real estate across the Lower Mainland.<\/p>\n
The study also analyzed individual municipalities to look at the average dollar amount of equity lost per household in each area, and the median percentage of equity lost.<\/p>\n
West Vancouver saw the highest percentage decrease, at 14.68%, and the highest average dollar amount lost per household, at $451,385.<\/p>\n
However, almost half of the nearly $90 billion in losses are outside Vancouver and West Vancouver.<\/p>\n
The analysis was carried out by Paul Sullivan, senior partner at Burgess, Cawley, Sullivan & Associates Ltd., a commercial real estate and property tax appraisal firm. It was carried out on behalf of STEPUP, a group that advocates for the end of what it considers to be unfair and politically motivated taxation policy.<\/p>\n
\u201cWhile the government\u2019s goal may indeed be to bottom out the housing market in an attempt to somehow address the complex issue of affordability, they are simply removing billions of dollars from the BC economy, to everyone\u2019s detriment,\u201d said Sullivan.<\/p>\n
STEPUP is laying the blame for the lost equity at the provincial government\u2019s door, saying that real estate taxes such as the school tax on $3m-plus homes and the speculation tax have caused the reduction in home values. It argued that this could have a devastating impact on those homeowners who relied on that equity for future retirement income.<\/p>\n
The group said in a news release, \u201cHomeowners rely on the equity in their homes, usually their biggest investment, to fund things like home renovations, post-secondary education, senior care costs, and retirement. While MLAs, academics, and public sector workers rely on secure, taxpayer-funded pension plans, many British Columbians rely on the equity in their home to get them through retirement, and to leave something for their children. This equity loss leaves many seniors, who have tried to plan carefully, in jeopardy.\u201d<\/p>\n
It added, \u201cThe impact on the economy and jobs will likewise be devastating. A recent BC Real Estate Association analysis confirms that a 10 per cent equity loss translates to 26,000 jobs lost, $1.8B in lost retail sales, plus lost tax revenues to government.\u201d<\/p>\n
Many homeowners, especially those affected by the school tax on $3 million-plus homes, have protested against the recent slew of real estate taxation.<\/p>\n
\u201cWe have been taxed out of our home,\u201d said Point Grey resident Ric Pow. \u201cMy wife and I are lifelong residents of Vancouver, and have owned and lived in Point Grey for 33 years. We have been careful with our retirement funds, and own our home mortgage-free, which has been a cornerstone of our retirement plan. Our home, along with most others in David Eby\u2019s riding, has lost 25% of its value since the NDP took power.\u201d<\/p>\n
However, not everybody agrees that homeowners are necessarily entitled to the equity they have gained from the real estate prices rised over the past few years \u2013 not even some realtors. Vancouver agent Barry Magee told Glacier Media, \u201cFor someone who thinks they are entitled to 20% year over year equity increases, reality will soon set in that they are not real estate geniuses, they were accidental millionaires. If you didn\u2019t cash in your lottery ticket at the right time, or bought your ticket at the wrong time, you\u2019ve got no one to blame but yourself.\u201d<\/p>\n