Higher paying jobs may have resulted in slight improvements in making a house purchase more affordable in some Northern B.C. communities despite increases in the cost of a single-family home, according to the latest BC Northern Real Estate Board report.
The Housing Affordability Indicator (HAI) for 2018 in Northern B.C. is 26.9 per cent, a two per cent increase over 2017.
“Housing is considered ‘affordable’ if it costs less than 30 per cent of a household’s before-tax income,” economist Leslie Lax writes in a report for the board.
While affordability worsened slightly in 2018 in most northern BC communities, only 100 Mile House is significantly above that 30 per cent benchmark at 47.2 per cent of household income.
Prince Rupert came in at 28 per cent, down from 33 per cent last year. Smithers is at 26.6 per cent, and Kitimat remains the most affordable community in Northern B.C. at 20.6 per cent.
In Terrace, the 2018 average price of a single-family home is actually considered more affordable than in 2017. An average household needed to put 30.4 per cent of their income toward home ownership, which includes mortgages, taxes, and utilities. That’s down from 32.6 per cent in 2017, even though the price of a single-family home has gone up in Terrace.
“More higher paying jobs,” says Sheila Love, RE/MAX managing broker for Terrace/Kitimat on a possible explanation. “If a person is making more, [buying a home] will take away less of their income.”
Home purchase price growth in 2018 varied widely from community to community, with Kitimat seeing the largest increase. The cost of a home there rose by 34 per cent to $298,200 from 2017 to 2018, but a higher than average household income is keeping housing affordable, according to the report.
Though prices have calmed down since the initial LNG Canada announcement last October, Love says.
“The ones that haven’t sold have dropped their price. When the sudden announcement was made, of course, everything sold, but we have seen [prices] come down a bit. Our market in Kitimat is still better than it was in fall, but we are seeing more realistic pricing.”
Overall, the average price of a detached, single-family home in the region is at $316,321, up from $290,000 in 2017.
Terrace saw house prices increase by around nine per cent, from approximately $310,000 in 2017 to $340,000 in 2018.
Prince Rupert homes increased by around seven per cent, from $270,000 to $290,000, on par with growth in Smithers.
Fort St. John is the only community in Northern BC reporting consistent improvements in affordability, largely due to a persistent drop in house prices over the period.
Love says in areas where industrial projects are focused, there is an increased demand for housing. Sales experienced a lull over winter, but have since started to pick back up again in Terrace and Kitimat, she says.
“It’s started to ramp up again at the beginning of April,” she says. “We’re starting to see a lot of younger families wanting to move up to this area because of the potential for jobs with LNG.”
In Kitimat, Terrace and Prince Rupert, Love says there are still affordable houses available.
“Our inventory is still pretty good, it’s still a good time to buy and people can afford to get into the housing market,” Love says.