B.C.’s deflated LNG project outlook reduces northern property values
In a province of mostly rising property assessments, the onetime 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.
Kitimat, however, 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 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.
That is a contrast from 2014 when the community posted a province-leading 27-per-cent increase in assessments, but that was close to the market’s peak on the speculation of imminent LNG developments, said area realtor Sheila Love.
“Then in 2016, it just died as soon as all the projects were put on hold,” said Love, managing broker for Re/Max Kitimat Realty and Re/Max Coast Realty in Kitimat and Terrace. “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, said Love.
“Kitimat had a bit of a speculative bubble around LNG projects, or prospective projects,” said Cameron Muir, the B.C. Real Estate Association’s chief economist. “Now, we’ve seen prices come down.”
Despite the steep drop in assessments for 2018, which are a measure of value that B.C. Assessment sets as of July 1 every year, Muir said market activity for the region has looked more stable since then.
Fort St. John in B.C.’s north east saw assessments deflate 4.6 per cent on B.C. Assessment’s 2018 property roll. 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.
Generally, however, Muir said assessments 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, and Muir said some of the value was driven by the desirability of communities as retirement destinations.
Parksville and Qualicum, for example, saw average assessments rise 22 per cent to $440,000 and $546,000 respectively. Further north in Courtenay, average assessments were also up 22 per cent to $440,000.
“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.
Homeowners have until Jan. 31 to file an appeal of their assessment with the B.C. Assessment if they feel the change in their property value, which can influence property taxes, is out of line.