The prospect of liquefied natural gas plants being built in northwestern British Columbia has sent assessed values for residential properties soaring in the region.
In the District of Kitimat, the average assessed value for single-family detached homes was $228,000 on July 1 last year, up 26.7 per cent from the previous evaluation on July 1, 2012, according to new data released Thursday by BC Assessment.
The provincial Crown corporation provided valuations on a wide range of residential and commercial properties. Bragging rights for British Columbia's most expensive residential property belong to Lululemon Athletica Inc. founder Chip Wilson, whose Vancouver waterfront mansion along scenic Point Grey Road has been valued at $54.2-million. In the previous annual assessment, as Mr. Wilson's property was being developed, the value was pegged at $35.2-million.
Across British Columbia, the total value of assessment rolls climbed a modest 1.35 per cent. But in Kitimat, the real estate market is booming.
Rose Klukas, Kitimat's economic development officer, said local housing prices continued to rise in the second half of 2013 – a sharp improvement from 2010, when many workers left the community after West Fraser Timber Co. Ltd. closed its Eurocan pulp and paper mill.
"What we're seeing is people coming in and investing in Kitimat because they see the writing on the wall for future development," Ms. Klukas said in an interview.
Kitimat's economy rebounded in 2012 as Rio Tinto Alcan embarked on a modernization program for its aluminum smelter. And while no final investment decisions have been made yet on LNG projects, energy companies have opened local offices and are doing some preliminary work.
Kitimat LNG, a 50-50 joint venture between the Canadian units of Chevron Corp. and Apache Corp., is seeking Asian buyers for LNG. Also in the Kitimat area, the LNG Canada project headed by Shell Canada Ltd. has Asian partners that have agreed to buy LNG – PetroChina, South Korea's Kogas and Japan's Mitsubishi Corp.
Rental vacancy rates in Kitimat hit 40 per cent several years ago, but have tumbled to near-zero for availability. Some Kitimat landlords who formerly charged monthly rent of roughly $600 for an apartment have renovated their units and are now able to collect more than $1,500 a month, said Ms. Klukas, who has been economic development officer since August, 2011.
"When I started in this job, it was pretty dire straits here. In a short period of time, the investment climate has changed quite dramatically," she said.
In nearby Prince Rupert, excitement over proposed LNG projects is also increasing. Malaysian energy giant Petronas is leading the Pacific NorthWest LNG project, while BG Group's Prince Rupert LNG Exports Ltd. is another major player.
Assessed values for single-family homes in Prince Rupert averaged $196,000 last July 1, up 8.9 per cent from the previous annual valuation, said Christopher Whyte, deputy assessor in the North region.
Average assessed values for single-family housing rose 8.8 per cent to $348,000 in Fort St. John in northeast British Columbia, where energy companies are focusing their drilling efforts for natural gas in the Montney play.
Housing prices in the Vancouver region were relatively flat. A typical property on Vancouver's East Side had an assessed value of $1,135,000 last July 1, up 4.9 per cent from the previous evaluation. On Vancouver's West Side, the latest assessment was $1,249,200, down 0.5 per cent from July 1, 2012. Most homeowners in the Vancouver area will see assessed values in the range of falling 5 per cent to rising 5 per cent, said Dharmesh Sisodraker, deputy assessor for the Vancouver Sea to Sky region.