Real Estate Market in Rupert


#1

Hi everyone

I’m considering buying an investment property or two in Rupert, and would love to hear some anecdotal evidence about where the market is heading. I know that its been on a tear recently, but how much has it actually risen in the last 12/24 months? Is it mostly locals buying or investors from outside of the area? And which geographies/segments of the market are hot?

Would love to hear some local perspective, and maybe get a conversation going about the market. I know Rupert is a small town, but I’m really surprised at the lack of information available online, either from the usual sources or in the forums.

Thanks in advance,
Investor


#2

So you want to make some quick cash with out doing your due diligence. Sweet cut me in


#3

Thanks for the lovely comment, but its not easy to do due diligence when there is no data available! I thought it might be interesting for anyone with a hand in the market to get a discussion going. It seems like there is virtually no public information available, which does no favors for anyone invested in the market.

I’m guessing you don’t own any property in Rupert yourself. How healthy is the rental market right now?


#4

I don’t know where you are from so I don’t know what you believe is a good price for real estate, but those of us who have been here for years are seeing very inflated prices for old and in some case crappy houses. Rentals for homes and suites have also increased substantially making it difficult for lower wage earners.


#5

Thanks for the reply. Who is buying? Locals or investors from out of town? Are there any plans to create more subdivisions and increase the amount of property on the market? I’m from Vancouver by the way. I know of a couple other people who have either bought property in PR or who are considering it. Seems like that’s the way things are going.


#6

Typical rents in Prince Rupert were for the most part affordable with the decline in overall employment in town with the closure of mill, units for a quite a few years were plentiful. Even though many have had lower incomes people seem to manage fairly well.
Now it’s more like how it was in busier times, however when rents were high years ago there was plenty of work here as well. Now certain people are making good pay while others struggle.
I would be very careful at this point: talk to property managers in town the real gravy train has subsided. While there is a shortage of small apts for rent, many out of town are buying on speculation and thinking property managers can rake in huge dollars for houses and larger suites for a time they did but that the big rush isnt there at the moment anymore for that type of property. If some of these projects pan out maybe their will be demand for larger units and homes. Some have had to rent smaller apts as they got kicked out of other places that were put up for sale. As I said my advice is to talk to property managers in town.


#7

Right now it sounds like most of the growth will be occurring in Port Edward earlier than Prince Rupert, it is 15 min drive from Rupert.


#8

[quote=“investor”]Hi everyone

I’m considering buying an investment property or two in Rupert, and would love to hear some anecdotal evidence about where the market is heading. I know that its been on a tear recently, but how much has it actually risen in the last 12/24 months? Is it mostly locals buying or investors from outside of the area? And which geographies/segments of the market are hot?

Would love to hear some local perspective, and maybe get a conversation going about the market. I know Rupert is a small town, but I’m really surprised at the lack of information available online, either from the usual sources or in the forums.

Thanks in advance,
Investor[/quote]

The real estate market here has been a roller coaster ride for the last 10-15 years. When the pulp mill shut down 10+ years ago houses weren’t selling and you could get a reasonably nice house in a good neighborhood for $100k or so. Around 2005 things started to heat up with word that a container port was to be constructed. Many who had left when the pulp mill closed sold out to a mix of investors and local buyers. Prices increased substantially until the global market crash in 2008 and the supposed boom never happened. The market again slowed and prices dropped. Now the prospect of growth is better than ever and the real estate market has once again heated up accordingly. You may have missed the boat somewhat as an investor as prices have risen substantially over the past while although once the rubber hits the road on some of these projects I would imagine that they’ll rise some more.

It’s my understanding that outside investors have helped to drive the prices up and many locals have scrambled to buy before they were priced out. As for new subdivisions, the official community plan highlights some areas designated to be developed although there are many available lots including some in incomplete residential developments.

The rental market is pretty hot right now and you shouldn’t have trouble finding decent renters if you are patient. If that is what you have in mind, be patient in finding the right tenant as there are likely to be many that could pose a risk to your investment.


#9

Most properties are being bought up by investors, local and out-of-town.

The economy of PR has certainly turned around when compared to the severely depressed economy from 2000 to 2007 (ironically, I spent most of my time out of the city during this period)…every year seems to be building (albeit slowly) on the year before.

Many people have moved back and are finding good jobs in the city.

Several major projects are being proposed for the region (many are skeptical however on how many will make it to shovels in the ground):
Pacific NorthWest LNG (Petronas)
Prince Rupert LNG (BG Group)
Aurora LNG (Nexen/CNOOC)
Woodside LNG (Woodside Energy)
Triton LNG (AltaGas/Idemitsu)
Tuck Inlet LNG (Imperial/ExxonMobil)
Watson Island LNG
Canpotex Export Terminal
Eagle Spirit Oil Refinery
AltaGas LPG Terminal

The market is clearly only going to get stronger…there is a major LNG investment decision announcement slated for November/December (Pacific NorthWest LNG)…if that is a positive announcement that means over a $10 Billion dollar investment will occur in the PR area and with that will come 4500 construction jobs over 5 years, and 630 jobs once the terminal is operating…there is no where near enough housing stock or apartments to handle that type of influx of people…and that is just one project. Of course if the announcement is not good, the market will certainly see a downturn.

Surviving industries in PR however are very strong…the grain terminal just had its best year ever, the local container terminal is growing every year and is expecting further expansion, a new pellet export terminal opened last year and the coal terminal is still strong (despite being down a bit from last year).

I would say right now is a great time to invest in this area…prices are still good (but growing)…if you wait too much longer you will be SOOL and that goes double if there is a positive announcement this winter.


#10

If you are looking to make a quick buck with low risk you missed the boat. Anything not requiring a teardown at a reasonable price will have been sold long ago. If the large project anouncements are good you still could stand to make some cash… If they are bad you will lose your shirt.

Given prince ruperts anti business anti development climate Id stay away. Invest in terrace instead. If rupert does well so will terrace and with all the development that is ACTUALLY occurring in kitimat prices will go up. Prince rupert is just far too risky right now.


#11

What exactly is happening in Kitimat? The modernization of Alcan is what is happening there right now, and that is nearing completion. When it is complete, all the construction workers will be gone and Alcan will be reducing it’s workforce by 300-500 jobs due to modernization…kitimat is in the same LNG boat as us at the moment, and industry experts are saying the petronas LNG is the most advanced and the closest to a positive investment decision out of all LNG terminals proposed in the province. northern gateway is not going to happen…so again, I ask what is happening in kitimat outside of Alcan modernization which has inflated the housing market there due to the influx of construction workers?


#12

Youre missing the point. There is real actual development going on there a real reason for the prices and a real pro development community. Prince rupert ks speculation plain and simple.


#13

Maybe you should explain why you think there is a difference. BTHEDOG is right, other than the Alcan modernization in Kitimat its future is no different than Rupert/Pt. Ed. Where’s the real development going on?? Its all tied up with the proposed LNG projects. Its positive to see office’s opened but everything is speculation, not definitive. Until I see a “shovel” in the ground, I won’t believe anything.


#14

Uhh alcan is real. Its a multi billion dollar project that is really going on and is driving prices. Its not speculation its real. If nothing else comes prices will come down but right now there is a reason beyond pure speculation for the prices. The piss ass projects in rjpert like the pellet plant just dont compare.

The port was operational long before the price jump so you cant say that has anything to do with it. These high prices are not a result of development or prosperity like in kitimat. If something goes ahead great you will make money. if nothi.g does there will be a massive correction. Houskng in terrace is much more reasonably priced than rupert and therefore if nothing goes forward in kitimat you stand to lose less money than in rupert because the correction will be smaller. Imo now is the time to sell assets in rupert and buy elsewhere where prices are undervalued.

Kitimat has as many projects proposed as rupert if not more and if i recall correctly they are closer to realization than the ones in rupert. So please tell me why should i risk MORE money in a notoriously business unfriendly city that currently has nothing going for it but the usual hopes and dreams? Big things are comi.g right? Well why wouldnt i choose to risk less money that will gain the same if not bigger return? The risk is the same its a no brainer


#15

Agreed. The proposed LNG projects look good for future prosperity, but, I will believe it when I see it.


#16

[quote=“jesus”]Uhh alcan is real. Its a multi billion dollar project that is really going on and is driving prices. Its not speculation its real. If nothing else comes prices will come down but right now there is a reason beyond pure speculation for the prices. The piss ass projects in rjpert like the pellet plant just dont compare.

The port was operational long before the price jump so you cant say that has anything to do with it. These high prices are not a result of development or prosperity like in kitimat. If something goes ahead great you will make money. if nothi.g does there will be a massive correction. Houskng in terrace is much more reasonably priced than rupert and therefore if nothing goes forward in kitimat you stand to lose less money than in rupert because the correction will be smaller. Imo now is the time to sell assets in rupert and buy elsewhere where prices are undervalued.

Kitimat has as many projects proposed as rupert if not more and if i recall correctly they are closer to realization than the ones in rupert. So please tell me why should i risk MORE money in a notoriously business unfriendly city that currently has nothing going for it but the usual hopes and dreams? Big things are comi.g right? Well why wouldnt i choose to risk less money that will gain the same if not bigger return? The risk is the same its a no brainer[/quote]

Both BTHEDOG and I both said other than Alcan what else is going on, and your first words were “Uhhh Alcan is real”. Nothing Jesus is guaranteed with LNG for either areas, we could have missed the boat on that. I have lived my whole life in the Northwest I have seen it all, spending my youth in Terrace and adult life in Rupert. I beg to differ about house prices in Terrace, they are not more reasonably priced. Terrace is not a union town so the wages earned are not as high. There is no crystal ball telling us what exactly is going to happen, its a wait and see game.


#17

[quote=“Gracies Mom”]

[quote=“jesus”]Uhh alcan is real. Its a multi billion dollar project that is really going on and is driving prices. Its not speculation its real. If nothing else comes prices will come down but right now there is a reason beyond pure speculation for the prices. The piss ass projects in rjpert like the pellet plant just dont compare.

The port was operational long before the price jump so you cant say that has anything to do with it. These high prices are not a result of development or prosperity like in kitimat. If something goes ahead great you will make money. if nothi.g does there will be a massive correction. Houskng in terrace is much more reasonably priced than rupert and therefore if nothing goes forward in kitimat you stand to lose less money than in rupert because the correction will be smaller. Imo now is the time to sell assets in rupert and buy elsewhere where prices are undervalued.

Kitimat has as many projects proposed as rupert if not more and if i recall correctly they are closer to realization than the ones in rupert. So please tell me why should i risk MORE money in a notoriously business unfriendly city that currently has nothing going for it but the usual hopes and dreams? Big things are comi.g right? Well why wouldnt i choose to risk less money that will gain the same if not bigger return? The risk is the same its a no brainer[/quote]

Both BTHEDOG and I both said other than Alcan what else is going on, and your first words were “Uhhh Alcan is real”. Nothing Jesus is guaranteed with LNG for either areas, we could have missed the boat on that. I have lived my whole life in the Northwest I have seen it all, spending my youth in Terrace and adult life in Rupert. I beg to differ about house prices in Terrace, they are not more reasonably priced. Terrace is not a union town so the wages earned are not as high. There is no crystal ball telling us what exactly is going to happen, its a wait and see game.[/quote]

I would have to agree being here most of my life as well… It’s all speculation and the realtors are laughing all the way to the bank …


#18

No one is arguing the importance Alcan, it is the biggest employer in the Skeena/North Coast area…however all of the activity in Kitimat at the moment is due to that smelters modernization, which has been on going for a few years now and will be coming to close very soon. When that is over, all the workers will be going home and the work camps will be coming down. On top of that, Alcan will drop its employment from 1500 before modernization, to about 1000 afterward (due to modernization) which means they will have to shed some operational jobs, which are MUCH more damaging to that community than losing these 2000 construction workers that have been flooding in.

[quote]
The port was operational long before the price jump so you cant say that has anything to do with it. These high prices are not a result of development or prosperity like in kitimat.[/quote]

The price jumps in Kitimat are directly due to a squeeze in the housing market due to the flood of construction workers relating to Alcan modernization (something that is ending soon) and proposed announcements relating to Northern Gateway, the oil refinery and their 3 LNG projects (none of which have made investment commitments). Also Alcan has been around for years in that community…things started jumping there when construction began on modernizing it.

[quote]
Kitimat has as many projects proposed as rupert if not more and if i recall correctly they are closer to realization than the ones in rupert. [/quote]

Actually you are wrong again. Kitimat doesn’t even have half the number of proposed projects as Prince Rupert:

KITIMAT & AREA ON-GOING/PROPOSED PROJECTS:
Alcan Modernization Project (on-going)
Kitimat Clean Oil Refinery (proposed)
Northern Gateway Pipeline Terminal (proposed)
Kitimat LNG (proposed)
LNG Canada (proposed)
Douglas Channel Energy LNG (proposed)

PRINCE RUPERT & AREA ON-GOING/PROPOSED PROJECTS:
Ridley Terminals Expansion (on-going)
Ridley Island Road/Rail/Utility Project (on-going)
Fairview Container Terminal Expansion (on-going)
Pacific Northwest LNG (proposed)
Prince Rupert LNG (proposed)
Aurora LNG (proposed)
Triton LNG (proposed)
Woodside LNG (proposed)
Watson Island LNG (proposed)
Tuck Inlet LNG (proposed)
AltaGas LPG Export Terminal (proposed)
Canpotex Potash Export Terminal (proposed)
Pacific Future Energy Oil Refinery (proposed)

Furthermore, the Pacific Northwest LNG terminal is widely considered to be the closest to a investment decision (this year) out of all proposals for the province (including the ones in Kitimat) —> “Petronas’ project is seen as the most advanced on the West Coast and the company and its partners expect to make a final investment decision by the end of 2014, with a start date of 2019.” business.financialpost.com/2014/ … =edcd-2072

You can sing the praises for Kitimat all you want (and hey, they have just as much reason to be hopeful and optimistic as Prince Rupert), but everything happening there is because of proposed industrial projects and because of the on-going Alcan modernization construction boom. Take away the modernization project and Kitimat is basically in the same situation as Prince Rupert, but with less proposed projects and a loss of 300-500 operation jobs at Alcan.

As for Terrace, well they are just feeding off the industry of Kitimat and to a lesser extent Prince Rupert. Terrace is a service/retail centre…very little industry there. Without Kitimat or PR on either side, Terrace would literally have very little…the same can not be said for PR or Kitimat if Terrace was removed from the equation.


#19

Seems like many of the locals (both here and other individuals I have spoken to) are fairly skeptical of the LNG development. I’m not sure if this is based on an interpretation of the facts as they are, or whether its just from experiencing 2 or 3 ‘false dawns’ in the past. Either way, it means that real estate prices will probably rise until local investors change their minds.

As an outsider, it seems extremely likely that at least 1-2 of these projects near Rupert gets the green light (Petronas + 1 other?). Add that to the various other projects that are happening, plus the increased volume going through the port, and it seems like a no-brainer to invest.

As for the argument that real estate prices have risen a lot already, I actually view that as a good thing. I like to buy in a rising market, and the experience of other Canadian towns that have undergone this kind of transformation suggests that there is lots more price appreciation to go. Also consider the lack of housing (and no real plans to build more), plus the fact that Rupert property was undervalued for a long time anyway. I think the speculative bubble has likely only just started.


#20

[quote=“investor”]Seems like many of the locals (both here and other individuals I have spoken to) are fairly skeptical of the LNG development. I’m not sure if this is based on an interpretation of the facts as they are, or whether its just from experiencing 2 or 3 ‘false dawns’ in the past. Either way, it means that real estate prices will probably rise until local investors change their minds.

As an outsider, it seems extremely likely that at least 1-2 of these projects near Rupert gets the green light (Petronas + 1 other?). Add that to the various other projects that are happening, plus the increased volume going through the port, and it seems like a no-brainer to invest.

As for the argument that real estate prices have risen a lot already, I actually view that as a good thing. I like to buy in a rising market, and the experience of other Canadian towns that have undergone this kind of transformation suggests that there is lots more price appreciation to go. Also consider the lack of housing (and no real plans to build more), plus the fact that Rupert property was undervalued for a long time anyway. I think the speculative bubble has likely only just started.[/quote]

Many locals are skeptical due to numerous failed things from the past…many don’t have faith in this city, but anyone in the shipping/port/export business would tell you a different story…those people are optimistic and know how their industry has changed and continues to change in Prince Rupert. When our break-bulk terminal modernized to a container terminal people though the city would boom overnight…when in reality the city is seeing more moderate growth year to year. The employment situation in town is MUCH MUCH improved today than it was in 2007…the shipping industry has grown considerably here. During that time however, the fishing industry has declined even more here, which perhaps is partly to blame with spoiling the positive effects of port expansion.

It is likely that 2 of the proposed LNG terminals for PR will go through, most likely Pacific Northwest (this is widely considered to be the most likely LNG terminal in BC, due to is supply of international investors/partners and with that a wide list of customers prepared to buy in. Same goes for LNG Canada in Kitimat…these two terminals are the most likely to go through in the Northwest.