“What do you think prices are going to do over the next few years, go up, go down or stay the same?”
We all want to know the answer to this question. In spite of the fact that we can’t actually know, we can make educated guesses.
I think we’re looking at relatively stable prices if we’re to look to the past to see where we’re going. The median sale price of a home in and around Dawson Creek in 2007 was $186,000. In 2012 the median sale price of a home in and around Dawson Creek was $248,000. That’s a 6.7% average annual increase in that time. That is a reasonable pace for housing prices to appreciate. Not too hot and not too cold.
But that was the past. How can we predict the future when it hasn’t happened yet? We could find someone with a crystal ball or we can take a look at the economic and demographic projections for our region going forward.
I find that we locals often have a hard time seeing the proverbial forest for the trees. We work here and live here and go about our lives here. We see life on a daily basis. That can make it difficult to get a grasp of what’s going on around us at a macro level.
When I look at the amount of investment that’s gone on in our region over the past few years it starts to look to me like we will most likely see prices rise, possibly quiet significantly, in the medium term. We have some mega projects on the horizon and the distinct possibility that we will be selling our resources to someone other than the USA in the near future. To me, that means that over the next 18 months we may be seeing the slowest housing market that we’re going to see for a while.
Lets take a quick inventory. Some of the money invested in the region recently includes tens of billions of dollars invested by major Asian companies. Companies like Mistubishi from Japan, Kogas from Korea, PetroChina from China, Petronas from Malaysia, and Sasol from South Africa have all entered into mulit-billion dollar joint venture partnerships with regional gas producers in order to develop the resource that sits underneath us.
This is all being done in anticipation of the opening of several LNG export terminals in Kitimat and Prince Rupert. There is currently more than $40 billion dollars of investment being proposed to build terminals. Some have been approved, some are still waiting for permits. These LNG terminals will allow energy producers to sell their product to buyer’s around the pacific rim for more than five times what they currently charge buyers in the US. This will have a dramatic impact on jobs in our region. There is also the Site C dam which will possibly go forward at a cost of $7.8 billion with projections of 35,000 direct and indirect jobs.
Normally, where you see jobs, you see population growth. With population growth comes increased demand for housing. With increased demand for housing comes increasing home values. The rate of price increases will depend on how much new stock is added to the current housing supply and how quickly the population grows.
Politics could have a positive or negative effect on growth as well. We have a provincial election coming up and we will most likely see a regime change. The rate at which businesses invest in the province could be affected.
All things being equal, it looks to me like prices are set to increase in Dawson Creek in the coming years. However, make your plans based on conservative growth estimates. If I see the market start to move quickly, you will all be the first to know.
Kevin Kurjata is Dawson Creek’s Real Estate Authority. He works out of Remax Dawson Creek Realty. Kevin can be reached at 250.719.3538 or by email at email@example.com">firstname.lastname@example.org. He is currently accepting new clients.