Q: I own 3 properties in Kitimat purchased in 2009. Last year in Kitimat everything looked bleak and my properties all lost value. With the latest industrial developments there they are now worth more than what I purchased them for. Each are tenanted. A real estate agent said things are getting busy there, and they expect 1500 new workers moving in in March; she said many want to buy and they are getting calls from investors as well. Should I sell now or hold a little longer?
A: This is what I wrote a few weeks ago to my subscribers. It is the current state of the market. Whether or not you should sell now, depends on your type of property where they are and also what you believe will happen in Kitimat’s immediate future.
Kitimat House Sales Double As Pipeline Debated
Some investors are apparently confident in the future of Kitimat, the northern BC port town that would be the terminus for the $6 billion Gateway Northern Pipeline.
The town is also near a new $4.2 billion liquefied natural gas plant and terminal that is expected to come on stream next year. Meanwhile, Alcan Inc. is proceeding with a billon-dollar expansion of its Kitimat smelter.
The pipeline is currently going through two years of public hearings that started this month in Kitimat. If approved, the pipeline would link the Alberta oil sands to Kitimat, where tankers would carry oil to Asia and the U.S. The pipeline would spin off about $3 trillion in jobs and investment, according to the federal government.
The town’s potential has double housing sales in the past year, though prices remain below the levels of two years ago.
Last year, Kitimat housing sales than doubled to 214 properties and the total dollar volume hit $29.8 million, up from $13.8 million in 2010, according to theBC Northern Real Estate Board. This makes it the hottest market across the north, where overall sales last year were up about 5% from a year earlier.
Kitimat Re/Max agent Shannon Dos Santos estimated 40% of her buyers are from out of town, with investors coming from Fort McMurray, Edmonton and the Lower Mainland.
The average price of a detached house in Kitimat was $146,000 at the end of last year, down from $170,600 two years earlier. But Kitimat agents say average prices have already increased in the first few weeks of 2012. Kitimat’s traditional double-digit residential rental vacancy rate has dropped to the 7% range, agents estimate, but they say no apartment buildings are currently for sale.