VANCOUVER—After years of dramatic increases, Vancouver’s most expensive homes are plummeting in value — but experts say affordability is still out of reach.

Single-detached family homes will plunge by five to 10 per cent this year in areas such as the North Shore, South Surrey, White Rock, South Delta and Richmond, according to BC Assessment Authority numbers released on Wednesday.

But it’s not “mission accomplished” as it’s too soon to tell whether multiple measures intended to curb speculation are working, said Andy Yan, an urban planner and director of Simon Fraser University’s City Program.

“It’s really showing you how real-estate prices, like the rest of the world, are in flux, particularly for single-detached homes,” he told StarMetro. “It goes back to the paradigm of cheap fast global capital coming into Vancouver and shaping our real-estate markets, in particular our residential markets.”

He will be watching what happens with other forms of housing over the next year.

On the west side of Vancouver, areas such as the University Endowment Lands and Point Grey expect to see drops of 12 per cent. For instance, the province’s most expensive home — a mansion in Point Grey owned by Lululemon founder Chip Wilson — has lost more than $5 million in value from last year.

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And the depreciating property values will represent about $10 billion in total lost equity, as detailed in previous StarMetro reports. One expert blamed the decline on a new provincial tax aimed at homes worth more than $3 million.

There have been many measures from all three orders of government to slow down the rapid price growth, which spiked by more than 30 per cent in 2016. Those include an empty-homes tax and new short-term rental regulations from the City of Vancouver; a foreign-buyer tax, speculation tax and higher property tax from the province; and stricter mortgage rules from the federal government.

But Yan questioned why there has been no discussion about a “flipping tax,” wherein owners who purchased property to resell at a higher value could be penalized. He also called for more data around that type of consumption behaviour.

Still, we may begin to see the impact of these measures, he added.

There is a particular set of factors to look at in Metro Vancouver, including interest rates, credit and loans and the influx of global capital. These factors have historically driven the market, Yan said.

“In a way, you’d expect a change to occur in our residential markets. But it took years to get into the problem and only relatively recently that we’ve tried having some level of response to the issue,” he explained.

He noted credit and loans are no longer as easy to obtain and that the Chinese government has recently placed restrictions on how much money people can take out of the country.

BC Assessment collects, monitors and analyzes property data. Its annual assessment is based on the estimate of a property’s market value on July 1 of each year.

The rest of the province will see five to 15 per cent increases in value for single-family homes, including in the Fraser Valley, Okanagan Valley and Vancouver Island. Condominium values will see hikes of up to 30 per cent, said Tina Ireland, regional assessor with the agency.

An increase in assessment value “doesn’t necessarily” translate into an increase in property tax, she added. What’s more important is how your assessment may change relative to those in your community.

Ireland said homeowners will likely be scrutinizing their assessments closely, given the introduction of the new provincial tax on properties worth more than $3 million. The deadline to appeal the assessment is Jan. 31.

Many things can affect market values, such as uncertainty around taxes, changes in demand for certain neighbourhoods or even new construction, she noted.

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Meanwhile, commercial and industrial property values saw increases of between 10 to 20 per cent across most of the province. But in the Greater Vancouver area, that number was upward of 40 to 50 per cent, reflecting the high demand, Ireland said.

Still, most businesses did not see revenues rise 20 or 30 per cent. That means it’s not just homeowners feeling precarious, as business owners have to deal with rising property and labour costs, Yan argued.

“That really shows how the speculated market has moved from residential into commercial and industrial,” he said. “The consequences of this particular property market sadly can be seen on the streets of Vancouver, whether it’s the record homelessness or levels of empty storefronts.”

With files from Jen St. Denis

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