Real estate deflates in Kitimat as B.C.’s LNG prospects cool

In a province of mostly rising property assessments, the one-time LNG boom town of Kitimat in British Columbia’s northwest is in its third year of assessment deflation as plans to develop natural-gas liquefaction plants in the region remain on hold.

Fort St. John, Fort Nelson, Terrace and Tumbler Ridge are all among the northern communities to see property assessments slide by about one to almost five per cent, according to data released by B.C. Assessment this week.

However, Kitimat, the terminus for two major LNG proposals awaiting investment decisions from their backers, saw residential property assessments drop in the range of 20 per cent for 2018, according to B.C. Assessment, the Crown corporation that evaluates property in the province.

The average residential assessment in Kitimat was $233,000 for the 2018 property roll, down 16 per cent from 2017 and 30 per cent from an average of $331,000 in 2015.

In 2014, the community posted a province-leading 27 per cent increase in assessments. But Sheila Love, a Realtor who works in the area, said that was close to the market’s peak on the speculation of immanent LNG developments.

“Then in 2016, it just died as soon as all the projects were put on hold,” said Love, managing broker for Remax Kitimat Realty and Remax Coast Realty in Kitimat and Terrace, a community 60 kilometres north.

“It was like somebody turned the tap off.”

Gone are the days when out-oftown speculators were buying up properties sight unseen and driving rents up, Love said.

“Kitimat had a bit of a speculative bubble around LNG projects, or prospective projects,” Cameron Muir, the B.C. Real Estate Association’s chief economist, said. “Now, we’ve seen prices come down.”

Despite the steep drop in

In 2016, it just died … It was like somebody turned the tap off.

assessments for 2018, which are a measure of value B.C. Assessment sets as of July 1 every year, Muir said market activity for the region has been more stable recently.

Fort St. John in B.C.’s northeast saw assessments fall 4.6 per cent on B.C. Assessment’s 2018 numbers. There the average assessment fell to $369,000 from $387,000 the previous year.

Economically depressed Fort Nelson also experienced a sharp drop in assessments, 8.4 per cent, to $164,000 from $179,000 a year ago.

The central-interior service centre of Prince George, on the other hand, saw a 5.2 per cent increase in the value of property assessments to hit an average $302,000.

Muir said assessments generally mirror the relative economic conditions around the province.

“B.C.’s economy has had four consecutive years of real economic growth over three per cent,” Muir said, “and we’re forecasting 3.8 per cent for 2018.

On Vancouver Island, homeowners saw assessments climb anywhere from 10 to 25 per cent for detached houses or 15 to 35 per cent for condominiums, according to B.C. Assessment. Muir said some of the value was driven by the desirability of communities as retirement destinations.

“It’s the same in Kelowna,” Muir said, where average assessments rose 17 per cent on detached homes to $725,000. Assessments on strata condos were up 16 per cent to $377,000, according to the provincial agency.