Hot B.C. Markets See Assessment Values Drop

While home values across B.C. have stabilized, some areas have experienced drops not seen since 2008.

By Brett Surbey | 4 minute read

BC Assessment’s 2024 reports on home assessment values show major shifts in traditionally hot markets, including Kelowna.

Rapidly increasing home values across the province finally hit a speed bump according to BC Assessment (BCA) in their recent 2024 assessment reports, which reflect the market value of homes as of July 1, 2023. 

Kelowna — a typically hot real estate market—saw falling home prices for the first time since 2008.

Assessor Bryan Muraro notes that the housing market across the province, including the Lower Mainland, has stabilized in value. “Most homeowners can expect only modest changes in the range of -5% to +5%. These assessment changes are notably less than previous years,” he said in a news release. 

The City of Vancouver saw an assessed value change of 4% between 2024’s assessment year and 2023’s. The previous year saw an increase of 7% between the 2022 assessed value and the 2023 assessed value. More notably, the City of North Vancouver had a jump of 10% between 2022 and 2023 and a sharp decline to a mere 2% increase in BCA’s most recent report for 2024.

The southern Interior saw marked decreases, with Kelowna seeing a decrease of 3% between the 2023 and 2024 assessment years. The previous year’s report showed Kelowna having an increase of 14% between the 2022 assessed value and the 2023 value. Those are some big swings for a well-known hot market. So, why now?

No Simple Answer  

Peter Austin, principal of Austin Real Estate Consultants, has worked in the assessment business for decades, helping property owners (mainly industrial or commercial occupants) challenge  BCA’s value assessments. He says that BCA generally does a good job assessing properties, and views fluctuations in assessed value as having multiple potential causes — one being a correction. “One thing to realize is that a percentage increase doesn’t mean a lot because BCA could have been high or low [in their assessment] the previous year. If your percentage increase is higher than others, BCA may be doing catchup,” Austin explains.

Austin adds that multiple factors affect BCA’s interpretation of market change. “BCA reevaluates complete areas property by property from time to time and finds they have fallen behind, BCA also does mass appraisal so the most prevalent grounds for appeal is when your property is different from others. Maybe there is an easement or part of the site is unusable. Or perhaps they have the wrong description or size for the building,” Austin tells Wahi.

A drop in assessed value could signify major changes in the housing market as of the time of assessment, but it also could be a readjustment to new data. “Sometimes they don’t have enough data [for] one year of a particular type of property. And the next year they get the data so they can make the necessary adjustments,” Austin adds. 

Tyrell Boake, a Lake Country Kelowna real estate agent with Royal LePage, points out that  Kelowna specifically saw some market changes that likely influenced the fluctuation. He notes that 2022 was a hot year when the market went up quickly in the first half of the year and dropped back down—with 2023 mirroring that trend somewhat. “The spring picked up, people had normalized to those interest rates, and then the Bank of Canada came up with two more rate increases and the market came back down,” he says.

Boak explains that when you look at how the market shifted between 2022 and 2023, the rationale behind  BCA’s assessments becomes clearer. “I think that BCA factored in those interest rates and [the market adjustments],” he adds.

Should Homebuyers Turn on a Dime?  

When big market shifts happen, sometimes homebuyers can feel the pressure to react — especially when home values turn in their favour. Though BCA’s assessments for these hot markets are worth noting, Boake thinks market participants need to get more information. “I look at the assessment as kind of a lagging indicator because they are behind. They are not really in tune with where the market is,” Boake explains.

Part of this “market lagging” is due to the actual day of assessment, as BCA’s 2024 assessments are actually as of July 1, 2023, So while the information is useful for market insights, it’s not current. “The BCA is always chasing where the market is and where they think it’s going,” Boake adds.

Rather than strictly relying on BCA’s assessments for market insights, Boake suggests taking a more holistic approach that considers multiple data sources. “[Consumers] need to look at what average prices are doing, what benchmark prices are doing, and [ask themselves] ‘Are we in a buyer’s market or a seller’s market?’” he advises. 

It’s also important to look at the broader market context, including interest rates, Boake noted. Boake recalls helping a client with a price analysis of their home, using BCA’s assessment value from last July as one of the factors. “But then we factored in what the market has done since July as a percentage-wise to give us unadjusted assessed value as of today,” he says.