LNG fuels housing price boom in northwestern B.C.

The possibility of exporting liquefied natural gas (LNG) has fueled excitement in three resource-dependent communities in northwestern British Columbia, sending prices for single-family detached homes soaring.

With assessed values for detached houses having more than doubled in Kitimat over a three-year period, this increase arose during the expansion of Rio Tinto Alcan’s aluminum smelter and speculation about LNG projects.

While Rio Tinto Alcan’s $4.8-billion (U.S.) modernization project accounts for a large portion of the real estate buzz in Kitimat, LNG is the common denominator for Kitimat, Terrace and Prince Rupert. In Terrace assessed values for detached houses has rose more than 50 percent, and one-third in Prince Rupert over a three-year period.

Although there hasn’t been any final investment decision for LNG proposals, according to data from BC Assessment real estate markets in northwestern B.C. perked up from mid-2011 to mid-2014.

Based on assessed values on July 1, 2014, average prices for existing detached properties in Kitimat jumped to $316,000, an increase of 124 percent from the valuation on July 1, 2011. In the regional service centre of Terrace, average detached values climbed 52 percent to $317,000 over a three-year stretch, and advanced 34 percent to $229,000 in coastal Prince Rupert.

From mid-2013 to mid-2014, BC Assessment Statistics show average assessed values for detached homes having rose 39 percent in Kitimat, increased 30 percent in Terrace, and gained 17 percent in Prince Rupert.