Saint John tax assessment not yet catching up to hot sales market

Saint John has seen some bleak growth numbers over the past seven years. It even slipped into the negative territory, a 0.48 per cent decline in 2014, when the province lowered the value of pulp mills in the city.

For four of the past seven years, growth in the port city has been under one per cent.

That's why the 1.83 per cent assessment growth set for 2020 is being greeted with cautious optimism, even though it's less than half that of Moncton and Fredericton. "The narrative in Saint John is good," said David Duplissea, CEO of the Saint John Region Chamber. "Investment is still coming."

Duplissea said real estate sales and investment are strong in the uptown core of the city in particular, and non-residential investment is up three per cent. Property sales growth is healthy across much of the province, including the greater Saint John area, which extends from Sussex to St. Stephen.

A record year

"This year in particular, it looks like it could be our best year yet, for sales," said Sherry Sheldrick, chair of the Saint John Real Estate Board. "The trends that we're seeing right now is that we are definitely going to surpass the year of 2007, which was our highest sales year yet. And we're just a few sales away from that number with two more months of sales still to be reported." Sheldrick says sales numbers slowly trended upward over the past three years, with multi-unit properties in the city, particularly those close to the uptown, selling particularly fast.

Real estate prices, however, appear to be holding close to those of 2018.

David Merrithew, chair of Saint John's finance committee, was hoping to see a greater assessment growth number from the province.

Connell Smith, CBC

"It's not enough," said Merrithew. "I don't know why it's not enough. I haven't come to that conclusion."

He said the city has lost about 300 homes over the past few years — mainly low-value vacant and dilapidated properties that were demolished — but also more than a dozen newer properties in the River Avenue neighbourhood that were purchased earlier in the year by Irving Oil and then removed. 

However, the company's new headquarters building on King's Square, is assessed at $39 million. Merrithew said the assessment rate would have to be above the rate of inflation to make a difference because salary increases for groups such as police and fire department staff have been above the rate of inflation.

Canada's current inflation rate, according to Statistics Canada, is 1.9 percent.

The 1.83 per cent growth for 2020 is slightly less than last year's number, 1.86 percent, but 2019 was considered a "double year" because of a temporary assessment freeze applied earlier by the previous provincial government.