Northeast BC is not the mountainous region you might be thinking of but is a lot more like northern Alberta. In this article I want to get into the specifics of investing and talk about who will buy investment property in Northeast BC, why, and (most importantly) what this means for you.
Simply put, housing will quickly become a major pain point for homebuyers in the very near future, and when there is pain, there are real estate investment opportunities. Therefore, housing will become a major opportunity for investors. If you can figure out who will buy when the market heats up, you can position yourself now to make suitable property investments. Here’s what is going on in the region:
Demographics of People Moving to the Region
According to the North Peace Economic Development Commission, the area has 64,000 residents and a projected 123,000 are expected to live there by 2020. That means: In just five short years, the area is projected to double in population. That’s a housing boom I want to invest property and money in!
It’s not just a pure numerical increase to consider, there’s another factor as well; the group of people moving to this area is young and affluent. The median age of people moving to the region is 29 years old with an average income over $100,000. They’re getting into their first serious job, they now have more money than they’ve ever had in their life, and they’re at a stage in life where they are meeting a significant other, settling down, and starting a family. This is a time in life where people are often putting down permanent roots and buying a house as an investment property (especially if they have a well-paying job).
Young families with high income who are looking to spend money… sounds like a real estate investor’s dream! This group will include both buyers and renters – people moving to the area long-term (or even permanently) for a career, as well as people moving to the area for a shorter period of time for seasonal work.
More Housing is Needed Right Now
This housing problem is not a future-predicted problem we’re anticipating for the region. In fact, there is a serious need for more housing right now. According to the North Peace Economic Development Region and The City of Fort St. John, the region desperately needs 5,500 more housing units today… and they need them TODAY! If the population doubles in the next five years, as it is projected, then that need will increase.
Even better news for those investing in property: Since it could take anywhere from six months to two years to build new houses, that demand is going to pile up upon itself and will likely get far worse before supply catches up to meet demand.
More NEW Housing is Needed
Even among the properties that are available today in the region, they’re not ideal for the people moving to the region. Fort St. John is the region’s largest city and is a fairly indicative representation of the entire region. Here’s what’s interesting about the existing residential structures in Fort St. John and the surrounding the area: nearly three quarters of the housing was built before 1986. Thus, if nothing changes, a flood of workers moving to the region will be fighting to buy investment property over a limited supply of 30 year old homes.
Put yourself in shoes of the demographic of buyers I mentioned earlier. You’ve finally moved out of mom and dad’s home; you have more money than you have ever had in your life; you might even have a significant other and perhaps even a baby on the way. Do you want to move into a home that is older than you are? Probably not, especially if you have the money to afford something much nicer and newer.
Not only are more units needed just to keep up with current demand, it’s likely that new buyers will drive demand for new development.
The Region Itself is Preparing for this Demand
People don’t just move to a region for jobs. They move for a life. Jobs, and the money that comes with those jobs, are one of the biggest draws; however, other supporting factors will play a part. Provincial and local governments are seeing the trends and are pouring a lot of money into the region.
Governments are investing in the region to make it a more attractive destination for its workers. Just to name a few: the highway is being twinned; a massive new birthing centre will help deliver all those babies of newly affluent couples; and the BC Hydro “Site C” dam will supply power, and jobs, to the region.
Moreover, supporting businesses will also need to develop in the area. The mining industry might bring in tens of thousands of people, but there will need to be restaurants, coffee shops, night clubs, grocery stores, and Laundromats to support that influx as well.
There is no magic required to know when an area is going to grow. You only need to look at the fundamentals – a growing demand of workers and a short supply of houses – to predict the opportunity for Northeast BC now and in the years to come.
Considering this information at your fingertips, if you are an investor, now is the time to buy investment property in Northeast BC.
– By Chris Biasutti