Northern BC real estate to see values increase and volumes drop

Supply and demand will rule the real estate market of Northern BC for the next few years, that according to a report released by the BC Real Estate Association last week.

The Association crunched its numbers and determined that the value of real estate in the North of the province will go up in value significantly over the next few years, but there will be fewer transactions.

The importance of the container port in Prince Rupert and the spin offs from it in Prince George are being credited with the turn around in the north especially in the corridor between the two cities.

Another positive trend is the sudden interest in recreational properties from Prince George west and north, an interest that is said to stem from the prospect of oil and gas exploration in inland areas of the province surrounding Prince George. The vast majority of those making the freshwater land purchases seem to be from Alberta, which has spurred the rumour mill to suggest that the long anticipated exploration around inland areas in the Central Interior is set to begin.

The Prince George Citizen provided a full report on the findings of the Real Estate Association on its website Friday.

Home sales drop forecast
FRANK PEEBLES
Citizen staff
(News) Friday, 27 April 2007, 06:00 PST

Home sales in northern B.C. are predicted to drop a little over the next few years but prices are projected to rise significantly, says a report from the B.C. Real Estate Association.

According to the document, northern B.C. had 5,605 unit sales in 2006 and that number is projected to drop to 5,400 in 2007 and drop again to 5,290 in 2008.

However, the average price for a northern B.C. home was $165,380 in 2006 and that is projected to climb to $189,000 in 2007 and up further to $197,000 in 2008.

Marnie Scott, acting co-director of the Northern Real Estate Association, said simple supply and demand is fueling the housing statistics.

"We are having such a good economy in our region. We have a huge number of people who have come and bought which makes fewer homes to sell, and that pushes the price up," Scott said.
"I would hazard a guess that the numbers could even be better than that between Prince George and Prince Rupert because of the port that's opening there this fall and the inland port project for here."

This is in spite of new home starts which have been factored into the projections, according to the BCREA report. It figured that "a total of $26 billion worth of major projects are either under construction or proposed in the B.C. Northern Real Estate Board area."

The report also factored in the decline in population for the northern region that was revealed in last year's census.

Although the numbers are strong for the combined north (the NREA roughly covers from 100 Mile to the Yukon, from the Rockies to the Pacific minus Chetwynd, Tumbler Ridge and Dawson Creek), Scott said the expectations are particularly bright for Prince George.

"We feel we will have huge numbers of people moving here for jobs," she said. "We have unprecedented demand for skilled workers in B.C., and here for sure, so we expect to see a large increase in those people coming here."

She also said one emerging resource sector is already playing a major role in the housing stats in the North, including the entire Highway 16 corridor.

"It seems Alberta is buying up all our lake properties and recreation properties in the region, and we are hearing hints that it is because of the oil and gas exploration that is going to be going on around here," Scott said. "The people who know that industry are making these investments, and they seem to be in large part from Alberta."

One downside Scott said needs to be addressed is the need for affordable housing.
"Even though these are not products realtors sell, we need, really need, multi-family-unit developments," she said, and called on all levels of government to get moving on that in the Prince George area.

"We are lobbying government about that, they know the situation very well, they assure us they are looking into it and in fact the provincial government did take the step already of lifting the property transfer tax threshold from $200,000 up to $300,000 for first-time home buyers, but we believe that should be the case for all homebuyers and we believe that is only a start on what needs to urgently be done," Scott said.