Hous­ing in­vestors face bid­ding wars in Kiti­mat

Vancouver Sun - - CITY - FRANK O’BRIEN Prince Ge­orge Cit­i­zen

KITI­MAT Res­i­den­tial real es­tate in­vestors hop­ing to make a quick buck in Kiti­mat are run­ning into vet­eran prop­erty own­ers who are jack­ing up prices as the largest pri­vate in­vest­ment in Cana­dian his­tory avalanches onto the town.

“It has been crazy in the last few days. I have been work­ing 16-hour days,” said Shan­non Dos San­tos of Re/Max Kiti­mat Re­alty, one of only seven real es­tate agents in the north­west B.C. town of 8,000 that will an­chor the $40-bil­lion liq­ue­fied nat­u­ral gas (LNG) pipe­line and ex­port ter­mi­nal green-lighted Oct. 1 by the LNG Canada con­sor­tium headed by Royal Dutch Shell.

“We had 87 home list­ings 40 hours ago. Now we have less than 10,” Dos San­tos said on Oct. 3.

A day ear­lier, a Dos San­tos client made an of­fer on a $125,000 build­ing lot that had been on the mar­ket for months.

The seller is now de­mand­ing $300,000 for the 8,000-square­foot par­cel.

An­other buyer bid $25,000 over ask­ing for a house on Oct. 1, but lost out to a higher bid, she said.

“My daugh­ter told me last night that she wanted to move back to Kiti­mat,” Dos San­tos said.

“I told her, ‘You should have told me a year ago.’ She is priced out of this mar­ket now.”

The av­er­age house price in Kiti­mat in the first half of this year was $256,500, up from $214,800 a year ear­lier, ac­cord­ing to the B.C. North­ern Real Es­tate Board, but ask­ing prices have in­creased since the LNG Canada an­nounce­ment, agents said.

Kiti­mat has only 734 pur­pose­built rental units and the va­cancy rate is 42 per cent — the high­est in B.C. — ac­cord­ing to the lat­est Canada Mort­gage and Hous­ing Corp. data from one year ago.

In the past three years — since the com­ple­tion of the Rio Tinto Group ex­pan­sion project — av­er­age rents in Kiti­mat have plunged to $928 per month from $1,730.

But this week some Kiti­mat land­lords were list­ing rents for two-be­d­room town­houses start­ing at $1,500 per month.

Land­lords have left scores of apart­ments va­cant for years in hope of a re­cov­ery in rental prices, Dos San­tos said.

“If you rent it now you are only able to raise the rent by two per cent per year,” she said, re­fer­ring to a Sept. 26 pro­vin­cial govern­ment de­ci­sion that capped the in­crease at that level for 2019.

Bruce Long of Mac­don­ald Com­mer­cial Real Es­tate Ser­vices Ltd. in Van­cou­ver said land­lords may have been smart to keep apart­ments va­cant.

“The cur­rent sit­u­a­tion is that prop­er­ties with higher va­can­cies are worth more per unit than prop­er­ties that re­tained low va­can­cies dur­ing the qui­eter times,” said Long, who spe­cial­izes in Kiti­mat rental apart­ment build­ings.

Kiti­mat apart­ment build­ings are now listed at $100,000 to $130,000 “per door,” but Long said some may be taken off the mar­ket in an­tic­i­pa­tion of higher prices and rents.

“Those apart­ment build­ing own­ers who con­sid­ered sell­ing prior to the (LNG Canada) an­nounce­ment are now less mo­ti­vated,” he said.

Vir­tu­ally no hous­ing has been built in Kiti­mat since 2014, but that is about to change quickly.

“The lights were off for three years and sud­denly they are switched on,” said Ja­son Pen­der, pres­i­dent of JV De­vel­op­ment Group of Van­cou­ver.

“Now there is a rat race to get build­ings started.”

JV, in part­ner­ship with Kerkhoff Con­struc­tion, is scram­bling to restart the largest res­i­den­tial project in Kiti­mat, which had been shelved back in 2015.

The 27-acre project will in­clude 47 town­homes in the first phase, which Pen­der hopes to start pre­selling within weeks. He es­ti­mates prices will start in the $325,000 range, but this has yet to be con­firmed.

“I ex­pect we will sell them all out in a mat­ter of days.”

Pen­der added that nearly all will be sold to out-of-town rental in­vestors.

The town­homes won’t hit the mar­ket for at least two years.

Very lit­tle hous­ing has been built in Kiti­mat since 2014, but a build­ing boom is in the off­ing with the LNG Canada project green-lit.

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