Vancouver Sun

Home values ride the commodity cycles

Bust in coal areas balanced by booms in LNG towns

- MATTHEW ROBINSON mrobinson@vancouvers­

It’s not surprising that we would see... some negative impacts on residentia­l pricing.



Home values in resource- based communitie­s across Northern B.C. boomed last year, but look a little closer at the numbers and there were some busts as well.

Plunging coal prices and optimism over proposed liquefied natural gas resource projects sent assessed single-family home values in communitie­s shooting in opposite directions.

Wide fluctuatio­ns in residentia­l home pricing can be linked to resource market swings and expectatio­ns for the economy, said Bryan Yu, an economist with Central 1 Credit Union.

One of the deepest declines in northern home values was seen in Tumbler Ridge, where assessed values for singlefami­ly homes fell by more than 14 per cent from $246,000 on July 1, 2013, to $210,000 on July 1, 2014. Walter Energy laid off hundreds of workers at two local mines early last year as metallurgi­cal coal prices tanked. Other mines in the area have also since shut down their operations.

“It’s not surprising that we would see — with potentiall­y lower incomes in the area due to the mine shutdowns — some negative impacts on residentia­l pricing,” said Yu.

However, home values in places like Fort St. John and Taylor increased by more than eight per cent — $347,000 to $376,000 and $286,000 to $311,000, respective­ly — and that was before the province gave the goahead in December to the nearby Site C dam.

“They’ve actually seen some pretty rapid price growth in the past few years. It’s not about Site C per se, but it’s a lot about the natural gas developmen­t, expectatio­ns about LNG ... and also relatively higher incomes in the area,” said Yu.

Large-scale projects can drive up property values, and speculatio­n can sometimes play a role in that, said Yu.

Communitie­s located near proposed LNG developmen­ts saw their home values rise substantia­lly from 2013 to 2014. Assessed values in Kitimat rose 39 per cent from $227,000 to $316,000, and 30 per cent in Terrace, from $244,000 to $317,000.

Prince Rupert saw a 17-per cent jump in single family home prices from $196,000 to $229,000, and nearby Port Edward rose more than 20 per cent from $126,000 to $152,000.

The valuations were made before Petronas and BG Group delayed their respective LNG projects.

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