Despite last week’s interest rate increase by the Bank of Canada and a drop in the number of house sales in the first six months of 2017, realtors and property experts say this is still the ideal time to buy property in Kitimat, especially for first-time buyers.
The B.C. Northern Real Estate Board (BCNREB), which represents nearly 370 realtors from Fort Nelson in the north to 100 Mile House in the south, released statistics two weeks ago for property sales by its members.
BCNREB President John Evans said in the Kitimat area, 29 properties worth $6.7 million sold in the first six months of 2017, compared to 47 properties worth $14 million sold at this time last year. Half of the 24 single family homes sold so far this year, sold for less than $227,600 and, on average it took these homes 129 days to sell.
At the end of June there were 104 properties of all types available for purchase in the Kitimat area through the Multiple Listing Service.
Evans added that Kitimat’s sales, listings, and average sale price are lower year-over-year, and sales activity numbers are “well off the bustling market of just a few years ago”.
“Communities like Kitimat that are dependent on oil, gas, or potential LNG projects continue to show sales numbers below previous years, though there has been some slight improvement for a few communities,” said Evans.
He added, however, that the situation wasn’t as dire as the figures indicate, stressing that the current market is a buyer’s market, for those wanting to get into property for investment purposes.
“Real estate is a long-term investment. If you look at the Kitimat market over the last 25 years, the house prices never drop lower than the last peak,” said Evans.
He added that while sales had dropped in Kitimat, so had the available inventory of houses in the town.
“Pricing is better than it was before. The average house price is down and the interest rates are still low,” said Evans.
“For first time home buyers who have steady income this is a great time to buy.”
RE/MAX Kitimat Realty realtor Shannon Dos Santos shares Evans’ sentiment, that the Kitimat housing market is ripe for especially first-time home buyers.
“The market has dropped to 2011 prices in some cases and we definitely have seen loads of first time home buyer’s purchasing while interests rates remain low,” said Dos Santos.
She said another feature of the current market is that buyers that had purchased houses before the surge in prices occurred in 2012 and who have equity in their homes, now have the ability to upgrade to larger “forever homes”.
“The interest rate being increased by 25 basis points has sparked buyers to move a little quicker. I have certainly seen an increase in buyer activity,” said Dos Santos.
“Although clients don’t like to see interest rates change, it was just a matter of time and it really is minimal for right now.
“It is a great time to get into the market in general, whether or not you are a first time buyer.”
She said she has noticed a definite change in the market in recent weeks, with a decline in the number of homes available for sale, brought about by low house prices.
Envision Financial vice-president of wealth management David Yan said while last week’s interest rate hike should “prompt British Columbians to take stock of their financial futures and plan accordingly”, there was no need for panic.
“A rate increase of 0.25 per cent is not by itself cause for concern with most people,” said Yan.
“To keep things in perspective, the cost of borrowing money is still extraordinarily low at the moment.”
He said many economists are now speculating that the Bank of Canada may announce another small increase before the end of the year.
“If you’re planning a major purchase like a home, you’ll want to double check that you still qualify for the amount you plan to borrow if interest rates continue to rise,” said Yan.