Kitimat topped northwestern municipalities with average single family home assessed values rising by 20 per cent, indicates information released today by the BC Assessment Authority.
As of July 1, 2018, the average Kitimat home was assessed at $235,300, a 20 per cent jump from the July 1, 2017 assessment of $195,700.
Speculation beginning in early 2018 surrounding the LNG Canada liquefied natural gas plant being developed followed by the announcement Oct. 1 the $40 billion project was going ahead helped drive up house sales and prices in that community.
Terrace ranked second in assessed value increases for a single family home with a nine per cent rise from $286,050 to $312,000.
Smithers assessed values rose by one per cent as did values in Prince Rupert.
In Smithers, the value rose from $283,000 to $286,000 and in Prince Rupert the value rose from $264,300 to $268,000.
The BC Assessment Authority bases its values on real estate sales and the annual July 1 snapshot is used by local governments in setting property taxes for the following year.
But how assessments play out when it comes to 2019 property tax bills has yet to be exactly determined because local councils have yet to finalize spending plans for this year and subsequent revenue requirements.
In addition to collecting their own taxes, local governments also collects taxes on behalf of regional districts and school districts.
Five residential properties in the northwest made the top 100 list of northern B.C. valued residential properties — one in Prince Rupert (a single family home on Graham Avenue valued at $1,022,000), three in Terrace and area and one in rural Smithers.
The Kitimat assessed value jump reverses a trend of several years of declining values.
Kitimat REMAX realtor Graham 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 6 months prior there was a lot of uncertainty around that issue and most buyers wanted to hold tight to see what happened,” he said.
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.
For 2018, residential sales more than doubled the total for 2017 and 2018 ended with a surge following LNG Canada’s Oct. 1 final investment decision announcement, Pitzel continued.
“For 2018 we had a total of 230 residential sales in Kitimat for $63,754,624, and for 2017 we had 104 residential sales for $22,712,230,” he said. “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.”
That meant in the fourth quarter of 2018, sales amounted to three-quarters of the 2017 total, a factor accompanied by higher prices for properties that were sold.
As of this week, there are 101 properties on the market here, a figure Pitzel said is not that unusual for this time of year.
And as the year progresses, he’s anticipating a continuing increase in sales activities as LNG Canada construction activity ramps up.
“We saw everything get sold in October of 2018, I believe the number was 91 per cent of homes listed were sold in that month, and then the market did replenish 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.
“We are in for quite the ride here in town over the next decade or so with the LNG Canada project moving forward and there is still a 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 as well as 2 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,” he added.
Pitzel also noted that house prices in Kitimat 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.”