St. John's housing prices, property assessments not lining up

An increasing number of homes in St. John's are selling for substantially less than their municipalassessment value, as the local housing market continues to slow down.

Overall housing sales are down 1.5 per cent, according to Royal LePage, and the City reported that new construction is down 25 per cent.

But while prices drop low, property assessments remain high. That growing discrepancy means some homeowners are paying more in city taxes than their properties are truly worth.

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Assessments are still based on a property's value in 2014 a time when oil was booming and the market was still strong.

In the past year, however, between 10 and 15 per cent of houses have begun selling for less than their assessment value, according to real estate agent Glenn Larkin.

Larkin says this trend is particularly evident among older, higher-priced homes.

This house on Waterford Bridge Road, for instance, was assessed at $559,600. It's now on the market for $499,000.

"It's a tough thing to tell somebody that their house is not as valuable as they think it is," said Larkin.

"It causes some pain for some owners of property."

Larkin says it's a new trend. The opposite was happening a few years ago, with homes selling for much more than their assessed value.

City looking atsystem change

Coun. Dave Lane says the city is aware of the discrepancy and is looking at means of change.

He said the City is trying to work with the provincial government to change the timing of assessments, so that they're more frequent and better represent the economic times.

The next time assessments are updated will be in 2019, based on a 2017 market.