Forget Vancouver. British Columbia’s housing boom is set to shift to the province’s rugged north as Royal Dutch Shell Plc’s US$31 billion liquefied natural gas project sparks an economic boom in the remote region.
British Columbia’s North Coast — a sparsely populated region usually synonymous with untamed wilderness, black bears and glacial fjords — is set for a turnaround as Shell and its four partners ramp up activity on Canada’s largest infrastructure project ever, according to Bryan Yu, deputy chief economist at Central 1 Credit Union.
Residential home prices in the North Coast are set to surge faster than any other region in the province through 2020 as the project in Kitimat prepares to employ as many as 7,500 people at its peak, according to forecasts from Yu. In contrast, prices in Vancouver’s Lower Mainland area — once one of the hottest housing markets in North America — will fall, keeping the overall provincial median price flat.
More broadly, the real estate slowdown in Greater Vancouver — the province’s largest metropolitan area — will dampen British Columbia’s overall prospects. The province’s annual economic growth will slow to a range of about 2.5 per cent to 3 per cent through 2020, down from 3.8 per cent in 2017, Central 1 said in a report Tuesday.
That reflects a shift in fortunes. Three years ago when Vancouver’s economy was roaring along as housing prices surged, the resource-dependent north was suffering a downturn. Lumber exports were falling, mining projects faced dismal commodity prices, and more than a dozen LNG projects were stalled amid a global gas glut.
In addition to the LNG project announced last month, the North Coast region is also benefiting from firmer demand for wood products and a booming port in nearby Prince Rupert, according to Central 1.
“The tide has turned for the area’s economic future,” Central 1 said. “The construction of the Shell-led LNG Canada project plant in Kitimat is set to positively transform the regional economy for years to come.”
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