By BRENT JANG
Monday, October 15, 2018
KITIMAT, B.C. -- The real estate market in Kitimat, B.C., is on a tear even as officials at an energy megaproject emphasize that there will be enough rooms available to accommodate an influx of construction workers.
LNG Canada said earlier this month that it is pressing ahead with plans to build a liquefied natural project in the northern B.C. community of Kitimat.
The $18-billion Kitimat marine terminal, the centrepiece of the $40billion investment by LNG Canada's five co-owners, is scheduled to employ up to 950 permanent workers when exports to Asia start in 2024 or 2025.
In the meantime, during the construction phase, more than 4,500 workers will be required at the peak of the project's building activity in 2021 and 2022.
With Kitimat's population hovering around 8,000 people, the goal is to set up work camps to accommodate the bulk of construction staff.
But there will still be demand from subcontractors and other workers who prefer to find their own places to buy or rent.
Earlier this year, home prices began rising in anticipation of LNG Canada pressing ahead, but the phone calls and e-mail inquiries about properties skyrocketed in early October after the project's approval, said Shannon Dos Santos, an agent with Re/Max Kitimat Realty.
"Our office has been working overtime, and I can't remember spending so much time sitting at my desk. I'm going to need a chiropractor," she said with a laugh.
On Oct. 1, Kitimat had 87 listings, mostly residential. On the morning of Oct. 2, Royal Dutch Shell PLC-led LNG Canada held a news conference in Vancouver to announce the approval of the energy project.
The number of available Kitimat listings since then has fallen to fewer than a dozen, after sellers accepted offers from a flurry of buyers, according to agents at Re/Max. New listings have been added over the past couple of weeks, but supply remains tight.
LNG Canada said it has a strategy in place designed to dampen real estate speculation and "minimize housing bubbles." The Shell-led group stresses that it won't be reimbursing construction employees for accommodation - known as "living out allowances." Out-of-town construction employees are instead being urged by LNG Canada to stay at one of the work camps, where living expenses will be paid by the consortium.
Local real estate prices surged from 2012 to 2014 during the modernization project at the Rio Tinto aluminum smelter in Kitimat, but the housing market declined from 2015 to 2017. The smelter completed its upgrades in mid-2015.
Most of the interest this month has come from out-oftown residents, led by people in the Vancouver region, according to Re/Max.
"The offers coming in are typically sight unseen. People aren't viewing properties, they're just buying them. And we've had individuals who've purchased two or more properties," Ms. Dos Santos said.
LNG Canada said it made two home purchases in the summer as part of a program to encourage senior managers who have families to relocate to Kitimat.
The consortium also has access to a work camp run by Civeo Corp., which has 434 rooms at a complex called Sitka Lodge.
There are also another 200 rooms in modular trailers on Civeo's site.
As well, Civeo and Bird Construction Inc. will be building a larger work camp, dubbed Cedar Valley Lodge, that will have space for at least 4,500 people.
The sprawling 64-hectare camp site, equivalent to nearly 100 city blocks, is near the planned LNG export terminal.
Horizon North Logistics Inc.
plans to get in on the housing action with its own 1,000-room work camp, to be located farther away from the LNG terminal site than Cedar Valley Lodge.
Prices for existing homes already climbed in anticipation of the co-owners of LNG Canada approving the energy megaproject. The average price of detached houses sold in Kitimat rose to $259,504 in first nine months of this year, up 14 per cent from $227,750 for the same period in 2017.
Francois-Charles Guay bought a house in Kitimat with his wife in 2014 while the region's economy was on a roll. Mr. Guay, a manager at the 1,000-worker Rio Tinto aluminum smelter, transferred to the B.C. community from Saguenay, Que.
He recalls the housing crunch in 2014, and he cautions that Kitimat will again face pressures in the months and years ahead.
"The work-force housing will cover most of the demand, but not all of it," Mr. Guay said.
Some landlords have reported that they still have plenty of rental vacancies, but those spots will likely be snapped up when hundreds of people start pouring into Kitimat in early 2019. Prospective tenants are worried that rents for newly refurbished units will increase sharply.
The city of Terrace, located a 45-minute drive north of Kitimat, is expected to attract many workers willing to commute. The price of detached homes sold in Terrace averaged $327,950 in the first nine months of this year, up 5 per cent from the comparable period last year.
"People are phoning Kitimat and can't find anything suitable, so they're coming to Terrace for houses, but there's also interest in industrial land," said Sheila Love, managing broker of Re/ Max offices in Kitimat and Terrace.
Some Kitimat landlords say they still have plenty of rental vacancies, but those spots will likely be snapped up when hundreds of people start pouring into the municipality in early 2019.
AMBER BRACKEN/THE GLOBE AND MAIL
The LNG Canada consortium is urging out-of-town construction employees to stay at one of its work camps, such as Civeo Corp.'s Sitka Lodge, seen on Oct. 5, in Kitimat, B.C.
Prices for existing homes were climbing even before the LNG Canada project was approved. The average price of detached houses sold in Kitimat reached $259,504 in the first nine months of 2018, up 14 per cent from $227,750 for the same period last year.
PHOTOS BY AMBER BRACKEN/THE GLOBE AND MAIL