Although an $89 billion dip in home equity across Metro Vancouver could impact recent homebuyers, longtime homeowners will see little impact.
STEPUP, which describes itself as a “grassroots non-partisan movement by concerned B.C. citizens,” released a report this week about an $89.2 billion loss in home equity across the region between April 2018 and April 2019.
Much of that loss would have been in Vancouver, at $43.6 billion.
The report was prepared by Paul Sullivan, senior partner at Burgess, Cawley, Sullivan & Associates Ltd.
Sullivan said that although Premier John Horgan’s government may be attempting to lower housing prices, “they are simply removing billions of dollars from the B.C. economy.”
“This provincial government suggests you don’t deserve to have that real estate ‘wealth’ and should pay even more, on top of rising income taxes, the highest gas prices in North America and ballooning ICBC and utility fee increases,” Sullivan said.
“The impact of the school tax surcharge on homes assessed at over $3 million, for example, means an average 35 per cent increase across Vancouver.”
But Tsur Somerville, an associated professor at the UBC Sauder School of Business, believes that “in any meaningful sense the average homeowner is fine.”
“Anyone who been in the housing market is still way ahead,” Sommerville said, pointing to Point Grey homeowners outraged by the report.
Point Grey resident Ric Pow, who was quoted in STEPUP’s report, said he and his wife have “have been taxed out of our home.”
The Pows have owned a home in Point Grey for 33 years but say their home “has lost 25% of its value since the NDP took power.”
But Somerville said homeowners who’ve been the housing market “have done so well, they’ve been so lucky in the lottery of life that I think arguing about it is somewhat socially irresponsible.”
The movement, he said, is “a grassroots movement of the rich.”
The people who will be negatively affected by this equity loss, Somerville said, are recent first time homebuyers.
“Anyone who’s bought near the peak of the market about a year ago isn’t looking at any gains, but just declines in equity.”