Who Will Buy During Northeast BC’s Resource Boom?

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By Chris Biasutti

Throughout this series, I’ve continually emphasized the value of investing in BC’s Peace Region and how the world s thirst for oil and natural gas has the potential to make Northeast BC the next resource boom location. Not unlike Northern Alberta, Northeast BC has a strong foundation on which growth can build, due to the region s affluence and economic diversity. This article will explore the benefits of investing in this region and discuss who will likely buy in Northeast BC and why and, most importantly, what this means for you as a real estate investor.

Simply put, housing will quickly become a major pain point for buyers in the very near future, and when there s pain, there’s an opportunity for investors. If you can figure out who will buy when the market heats up, you can then position yourself now to invest while prices are still low. To help you in doing so, here is a snapshot what is currently going on in the Peace 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 by 2020. That means that in just five short years the area is projected to double in population. That s a housing boom I want to participate in!

And 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 relatively 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. They are looking to put down permanent roots (especially if they have a well-paying job), and that includes investing in a permanent place to live. Young families with high income who are looking to spend money sounds like a real estate investor s dream!

Demographically, this is also the same group of people who might be currently living in their parent s basement and paying off large student loans while making a living in short-of-cash mode since becoming adults. 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.

Although the demographic is ideal for the market, the region is currently facing an impending housing crisis, with not enough housing available to keep up with the demand. 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. If the population doubles in the next five years, as it is projected to do so, then that need will increase even more. 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. This is a huge issue for consumers all over the world and if you’re wondering why products are in short supply, visit a website like www.cablegallagher.com to learn more.

With that said, there is an even more significant factor at work here, namely the demand for new housing.

New Housing Demand

The properties that are available today in the region are not ideal for the people moving to the region.  In Fort St. John, the region s largest city and a fairly indicative representation of the entire region, nearly three quarters of the housing was built before 1986. So, if nothing changes, a flood of workers moving to the region will be fighting over a limited supply of 30 year old homes.

Put yourself in the 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 ve 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? Possibly, but potentially not, if you have the money to afford something nicer and newer. So not only are more units needed just to keep up with current demand, it s likely that the particular tastes of new buyers will drive a specific demand for new development. 

The Effects of Demand on the Peace Region

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 but 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. Among these notable investments are the twinning of the highway, the development of a massive new birthing centre, and the BC Hydro Site C dam.

It s important as well to not discount the many supporting businesses that will need to develop in the area. The mining industry might bring in tens of thousands of people but there will need to be restaurants and coffee shops and night clubs and grocery stores and laundromats to support that influx as well.

There is no magic formula 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.

Chris Biasutti is the Vice President of Sales & Marketing for Western Canadian Properties Group and has developed a keen sense of evaluating high growth investment opportunities and is passionate about sharing this information with clients on how to best identify, analyze and select alternative investment opportunities and maximize the performance of their real estate portfolios.  He has assisted his clients in acquiring over $100M of investment real estate across a variety of asset classes, including residential investment real estate, mortgage investment corporations and residential land developments.  Contact him at: Chris@bluewaterinvestments.ca.

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