Clinton chats with Sam Laprade about the latest Bank of Canada key interest rate increase, variable rates and how to protect your financial future.
Clinton chats with Todd Veinotte on CityNews about the increase for residential assessments and the long-term outlook for property assessments. The two also talk about taxes and property valuation, the impacts of inflation, and the current state of the property market.
Increase In Residential Assessments
Todd Veinotte [00:21]
All right, welcome back to the show. Joining me here in studio for the first time in a very long time is Clinton Wilkins, our mortgage guru Clinton Wilkins. Happy New Year. Welcome back.
Clinton Wilkins [00:34]
Happy New Year to you too.
Todd Veinotte [00:38]
Well, it’s Friday the 13th.
Clinton Wilkins [00:40]
I heard that before I came over here was Friday the 13th. And, you know, I can be a scary day for people, you know, if you’re superstitious or
Todd Veinotte [00:49]
If you’re superstitious, and you’ve got gremlins. And that’s, I mean, that was our mic gremlin, right?
Clinton Wilkins [00:53]
Maybe, maybe it was. There hasn’t been as many people in the studio lately, so we decided to get it warmed up. I mean, it’s the New Year. It’s 2023.
Todd Veinotte [01:00]
I’m gonna blame you.
Clinton Wilkins [01:01]
You know, people blame me for all kinds of stuff. So why not just add it to the list?
Todd Veinotte [01:05]
All right, there you go. So first off, Clinton Wilkins, our mortgage guru, we’ve got our show Mortgage 101, Your Guide to Homeownership, which it’s first edition, the January edition, goes up tomorrow and Sunday. So let’s tee that up. First of all,
Clinton Wilkins [01:21]
I think it’s a great show. Todd, we you know, we really talk a lot about Merry Debtmas. You know, January’s a tough time for people. You know, coming here, I think next week, you know, what people are really talking a lot about is inflation. We’re talking about the rates, we’re talking about people’s finances, you know, January can be a really tough time for people. You know, depending on how last year was, maybe you had some unsecured debt that you kind of accrued, maybe you went to a little bit too wild over the holiday season. So we’ve really talked a lot about, you know, health and wellness, in terms of that financial aspect.
Todd Veinotte [01:53]
Yeah, we’ve talked about, again, a lot of different things in Mortgage 101. About newcomers and, and we get into new construction, and some of the pitfalls of new construction. So we really cover the gamut when it comes to this whole thing.
Clinton Wilkins [02:06]
Yeah, exactly. I, we we talk about, you know, everything that you know, has to do with your home or real estate, and really about what happens with mortgage lending. And luckily, that’s what I get to do every day here in our fine, fine city and our fine province. And, you know, I think information is so, so important, Todd. And I think really knowing what’s going on with your personal finances, knowing what’s going on with real estate, and the mortgage industry can be very daunting for people. There’s so many nuances to what we do every day. And, you know, this is our fifth season, which is amazing! Who would’ve thought there would be so much to talk about in terms of mortgage lending, but so much changes. And really a lot of what we talk about, you know, on the show is in the news. And you know, there’s obviously a lot of that conversation. And we do deep dives into all kinds of great topics
The long-term outlook for property assessments
Todd Veinotte [02:55]
We do, and one of the things that we talked about, well, we’ll discuss right now, of course, there is the fact that assessments are up on average residential assessments 20%. That means some would receive very little if any change, while others you’ve heard as much as 100% increase in assessments, right?
Clinton Wilkins [03:09]
Exactly. But it can be very challenging for people. Obviously, we know it’s a challenging time. And I’m, you know, very sensitive to that right now. People are going to see an increase in many, many cases. Some people are not seeing any increase, some people are seeing a decrease, but the average is 20%. But we are getting reports, some of our clients have had increases of 100% of their assessed value. You know, even digging into that a little bit. Even with 100% increase, some of these assessments are still way below the market value. And likely we’re going to see more increases in the years to come, Todd.
Todd Veinotte [03:49]
That’s not good news. That’s not what people want to hear.
Clinton Wilkins [03:51]
It can’t always be good news, though, we need to have realistic news. And you know, it’s not all about doom and gloom. I think this is going to be a slow burn from Property Valuation Services Corporation, it’s going to be a slow burn until the assessments are more in line with where the market values are, you know, really what we have seen and heard is the assessments are really meant to lag, like two years. So the assessments are really more meant to represent where maybe the value was in 2020 or 2021. And as we know, the values in those years had been increasing. So having an increase in these assessments that people are getting, I just got my assessment in my mailbox yesterday. I don’t know, have you received yours, Todd?
Todd Veinotte [04:33]
I haven’t checked the mail for a couple days.
Clinton Wilkins [04:34]
Okay, well, you might have to get some bad news and go check your mail when you get home, after the show wraps. You know, they’re coming out. And the good thing is with these assessments, you know, it’s going to feed into the municipality. Some municipalities are going to keep their tax rates the same. Some municipalities may increase their tax rates depending, you know, when they have their meetings and decide on what’s going to happen with the tax rates here on the back half of the year. And there is some time to play And, you know, in HRM, we get our final bill at the end of the year, that’s due in October. So it’ll be interesting to see what happens. Before we started our show here, I was actually just out talking to a couple people here that worked at City News. And, you know, we were saying, is this going to be a windfall for municipalities? Is the increase in the assessments just going to ingest that much more cash into these municipalities that, you know, they will be able to kind of expand the services and really what they’re offering. And I’m not 100% sure it will, Todd. Obviously, they’re going to have some more capital come in from the tax base. But we also need to remember these municipalities, their expenses are going up because of things like inflation, as well. So that’s going to balance out a little bit, but I think it will be interesting to see what happens with these municipalities over the next couple of years, as maybe the assessments continue to increase. But at the end of the day, it’s coming out of our pockets. You know, if you own a property in the province of Nova Scotia, your taxes, by the end of this year, are likely going to be more than they were in years gone by.
Taxes and property valuation
Todd Veinotte [06:08]
Alright, so when it comes to Property Values Corporations, is that what it’s called?
Clinton Wilkins [06:11]
Todd Veinotte [06:15]
Whatever, okay. It’s a private company, right? And funded by whatever, it gets it’s money through the municipalities, I’m assuming?
Clinton Wilkins [06:21]
Yeah, via the province. It feeds the data, all into to the municipalities because they need that for the you know –
Todd Veinotte [06:28]
It has to be independent, you can’t have the municipalities going out –
Clinton Wilkins [06:32]
I mean they have invested interest. They have invested interest there.
Todd Veinotte [06:35]
But, there’s this kind of, I guess, some people feel as though that Property Values kind of does the bidding of the municipalities and they go out and, and they do the dirty work so that the municipalities don’t have to raise the tax rate. What’s your response, or what do you think about that, is that foolishness?
Clinton Wilkins [06:53]
You know, what, I think that they have to be unbiased, Todd, you know what I mean? And luckily, there are mechanisms, if you don’t agree with your assessment. You can get an appraisal on your property, or if you recently purchased your property, and the assessments above the purchase price, you have some documentation that you can do an appeal. On the back of your assessment, there is a date in February that there’s a deadline that, if you do want to appeal your assessment, you can. And, you know, there are certainly, I think, some pros of having a higher assessment. You know, I’m not a realtor, but obviously I deal with mortgage finance every day. And that’s one thing we look at when somebody you know, buys a home or if you’re coming to, like refinance your property, I’m looking to see what is the assessed value of the property. Because if the assessment is very low, and you’re saying the property value is way up here, you know, what’s justifying that high, high value?
Todd Veinotte [07:46]
That’s often the case, though, isn’t it, though?
The current state of the property market
Clinton Wilkins [07:49]
Yeah, it’s an indicator, and the assessments have been lagging. And I think the assessments certainly have been lagging since we’ve had the increases. In Nova Scotia, we’ve had a very stable real estate market, which is great, but we still have some of the most affordable real estate from across this country, and I think we forget that. We’re like, “okay, the prices have just gone on beyond beyond,” but we still have some of the most affordable housing here. But we’ve had one-to-three per cent increases, this double digit increase business has really only been a symptom of the last three years. And will we continue to see these increases? I don’t think so. I think the increases now are going to level off. And people are asking me, do we think the property values are going down? I think the average sale price certainly may not be as high as it was. And I don’t think maybe homes are selling for as much over the listing price as they were. But overall do I think the prices are down. No, I think we’re into something that’s around the new normal, so things will balance out. But it will take Property Valuation Services a few years to then catch up to where really the market was.
Todd Veinotte [08:53]
But, look, it’s tough for people because we know what’s happening with interest rates and people who are on a variable or if they’re coming off the fixed and they’re renewing, and they’re seeing there’s hundreds more dollars,
People are feeling the burn of inflation
Clinton Wilkins [09:04]
Or if you’re on a fixed income and you don’t have a mortgage.
Todd Veinotte [09:07]
So people are paying hundreds more for their mortgages, and now they’re getting the property value could go up 100% That could potentially be $100, 200 more that you gotta tuck away each month to pay that bill or whatever it is.
Clinton Wilkins [09:19]
Yeah, it certainly could be hundreds, if not 1000s. More, depending on what’s going on with your assessment. Yeah, people are feeling the burn already, Todd. They’re feeling the burn, obviously, because of what’s going on with mortgage rates. That is a factor. But they’re also feeling the burn when they go to the pumps, they’re feeling the burn when they go to the grocery store. When you’re buying consumer goods, you’re feeling the burn. And that is a symptom of what’s going on with inflation. And really, the federal government is very concerned about inflation, and they’re trying to pull out all the stops to bring inflation down to like that 2 per cent type range.
A balanced market on the way
Clinton Wilkins [09:52]
And, you know, we really need the federal government to almost bring the economy into a recession type situation for that to happen. And a lot of economists think that we will be in a recession type situation before the end of the year. The one thing that I will note, you know, it’s been reported in the media, that the actual job gain in Canada was far, far in excess of where the economists thought the job gains were. So is that good news for inflation? Probably not. Is it a sign that there’s gonna be a recession? Probably not. But I think it’ll be interesting to really watch what happens this year. And we’re certainly one of the main things we’re watching is really those inflation numbers, I think that’s really something that we need to keep a very close, close eye on.
Todd Veinotte [10:38]
Where do you see the market going in the next year in Halifax?
Clinton Wilkins [10:41]
The real estate market here? I think that we’re going to have a more stable market. I think buyers and sellers are going to become maybe more on the same page. People have asked me, “Do we think it’s going to start becoming a buyers market again, where there’s going to just be so much inventory, that buyers are going to really have all the power, and they can, you know, pick and choose and really like kind of deem the the way things are going to be?” I don’t think that’s going to be for a long time, Todd, we still have very, very limited inventory. The one thing I will see, and I’ve seen the reports coming from many realtors, that real estate is certainly sitting on the market longer than it had been. So there’s maybe more days worth of inventory. But there’s not necessarily more listings out there yet. So, I think the market is becoming more balanced, and I think having a balanced market is the ideal situation. For a buyer and a seller. You know, you don’t want to be in a situation where one is always having the upper hand. I think that if we can get into this more balanced market, it’ll certainly be more efficient. And I think, you know, it’ll be better for everyone.
Todd Veinotte [11:49]
Okay. So a reminder, of course, we have a deep dive into a lot of these topics, and we do that in Mortgage 101 throughout the year. We have an episode each and every month, tt’ll air twice, Saturday and Sunday, 11 o’clock, and when we’re on tomorrow and Sunday again. So a reminder, everybody, to tune in and listen when you’re driving around in your vehicle or whatever.
Clinton Wilkins [12:12]
I know, it’s gonna be a rainy weekend here in Halifax, so what better thing to do than tune in to Mortgage 101? We are very passionate about the show. We’ve been doing this same format for five years. And, you know, I think we talked about a lot of really great topics. And if there’s something you want us to talk about, send me a Tweet, send us an email, and we’d love to talk about it. And then we pick out a couple cool songs as well. So, you know, we always have some fun. Something great to do on the weekend, and I encourage everybody to tune in!
Todd Veinotte [12:44]
Excellent, Clinton Wilkins, thank you. Great to have you back in the studio again.
If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.