During our Town Hall meeting and the AGM that followed, some owners wondered why council was talking about property values. Why was this a thing? Were council members thinking of moving?
Property Values are actually the most important evaluation that any good strata council should be constantly focused on. Nobody on council is planning to move. The reason it is suddenly being talked about so much is because recent councils didn’t really give it much thought, and that has led to challenges for all owners in the complex.
Your home is, for most people, the biggest investment you will make in your lifetime.
That value usually increases over time. We saw massive real estate pricing increases in BC prior to the empty homes tax being introduced, which helped reign in the madness.
Though rare, there are times when real estate values drop. When it comes to townhomes, that can happen when maintenance is ignored and properties become run down. If that value becomes lower over time than what you paid, you are in very deep trouble.
The Impact of DOM
Recent councils didn’t connect the things they were doing to the impact those actions had on property values. The result was a strata that suffered a bit visually, causing appeal to drop and DOM (Days On Market) to average an astonishing 213 days. This is far too long, and leads to lower interest from buyers when any of our units are up for sale. DOM is the primary metric used to establish overall property values for any unit in the complex. As a result, property values were starting to drop.
You don’t have to be wanting to sell your place to be concerned about property values. Here are several valid reasons why owners who have no intention of moving will be deeply concerned about the value of their property:
Mortgage Equity
As you pay down your mortgage, the difference between the amount you owe and the value of your property is critical. Interest rates constantly fluctuate. Some people squeeze in with a minimum downpayment. If interest rates increase at the time of the mortgage renewal, and the value of the property has not increased, you may be in a position where your mortgage is denied because you no longer meet the minimum test.
Even people with long-established mortgages that have considerable equity in their home will be concerned about the value of their property. Why? Because the greater the difference between that value and the amount you owe the bank, the better negotiation potential you have to get a lower rate or benefit in other ways.
Home Improvements
If you are planning to make home improvements, or you face a major levy, you may need to get a home equity loan, or a second mortgage. Again, having the highest possible value assigned to your property benefits you because you are in a good negotiating position to get a good rate and easy approval.
Inheritance Value
For some people, the value of their home represents the inheritance they are building for their families. They want that value to increase. My dad owned a farm and when he retired, he benefited from a substantial increase in land values at the time that allowed him to gift each of the children a substantial sum. He still had plenty left over to take vacations and cover his costs of living until he passed.
Reverse Mortgage
Some people prefer to use a reverse mortgage so that their kids don’t have to wait until they are old to benefit from the value of their parents’ home. Or they want to use those funds to enjoy their golden years through travel or other activities. A reverse mortgage will loan up to 60% of the equity of your home. Again, the property value is a critical part of the evaluation the bank will make. If the strata has been poorly managed, the banks will be nervous about the future potential and will likely deny the mortgage completely, deeming it too risky.
As you can see, there are many reasons to be deeply concerned about property values. It should be something every homeowner is constantly thinking about! And ensuring that property values are maintained represents the most important role for every strata council.
Ensuring that property values are maintained represents the most important role for every strata council.
One of the best ways to increase property values is through good curb appeal, combined with strong strata property management which demonstrates to buyers that this is a place they can be confident to move into to. This council will continue to focus on property values through good management.
Council is driven by a belief that with proper maintenance and oversight, Windsor Garden can be one of the most desirable places to live in the entire Hamilton area. And that will be a good thing for property values. For every owner.
This post is also available in:
