Residential property sales in Kitimat last year doubled those of 2017, spurred on by LNG Canada’s announcement it was proceeding with its $40 billion gas liquefaction plant here, says a Kitimat realtor.
“For 2018 we had a total of 230 residential sales in Kitimat totalling $63,754,624. For 2017 we had 104 residential sales for $22,712,230,” said Remax’s Graham Pitzel.
Interest in real estate began to solidify in the early part of 2018 when the provincial government announced a specific tax regime for LNG projects providing certainty for investors, Pitzel added.
“This caused buyers that were on the fence to make a decision as to whether they wanted to purchase or not, that now was the time to get in or they may wait themselves out of the market with price increases,” he said.
But sales activity soared following LNG Canada’s Oct. 1 announcement.
“From September 30, 2018, when investors kind of started speculating on a positive final investment decision, until the end of 2018, there were a total of 76 sales for $25,103,880,” said Pitzel.
That meant in the fourth quarter of 2018 alone, sales amounted to three-quarters of the houses sold throughout 2017, a factor accompanied by higher prices for properties that were sold. So great was the sales activity from October onward that in just that month, 91 per cent of listed homes were sold.
“The market has replenished itself for the next influx of investment which I believe will be when the workers start to show up for the project. This should be in the next couple months as a starting period,” Pitzel said.
As of last week there were 101 homes on the market, a number Pitzel said was not unusual for this time of the year.
And he’s predicting another busy real estate market once spring arrives.
“We are in for quite the ride here in town over the next decade or so with the LNG Canada project moving forward.
“There is also great potential for other projects in our area, such as the Kitimat LNG plant, a floating LNG plant by the Haisla, a propane export facility and two very large refineries that have had new life in the past couple weeks due to Alberta’s unhappiness with their ability to transport crude oil out of the province,” Pitzel added.
Overall, Pitzel noted that Kitimat property values rise and fall based on the community’s industrial activity and prospects.
“Rio Tinto had a union contract renewal in 2017 that had a contentious issue regarding the pension plan as part of the negotiation and that created some uncertainty as to whether the contract would be accepted or rejected by the membership.
“Ultimately this contract was accepted and business continued as usual, but for about six months prior there was a lot of uncertainty around that issue and most buyers wanted to hold tight to see what happened,” he said, citing a recent example.
Pitzel also noted that house prices here are still very low in relation to the rest of the province but wages are much higher than elsewhere, giving residents “the ability to still get out and enjoy the area we live in.”
In October last year, the BC Northern Real Estate Board reported that 137 residential properties worth $33 million changed hands in the first nine months of 2018 across the north of the province, compared to 73 properties worth $15.6 million in September 30, 2017.
“Of the 99 single family homes sold so far (in 2018), half sold for less than $235,000. These homes took on average 112 days to sell. In addition, 14 half duplexes and 17 townhomes were also sold.”