Fort St. John real estate prices still continue to rise. In 2012, growth in the local real estate market pushed average home prices up a remarkable 10 percent. This was followed by more growth in 2013 that further extended the price trend’s upward surge. Surprisingly, this isn’t deterring buyers, who continue to snatch up properties almost as quickly as they can be built.
Despite the increase in real estate prices, property sales haven’t slowed down, and now commercial land and buildings are in extreme short supply. Entrepreneurs are coming to the city with the intent of opening industrial service companies to support the gas extraction and production industries working on the Montney Formation. Unfortunately, most are simply not finding any buildings to buy or rent.
Similarly, the desperate lack of restaurants in Fort St. John is proving difficult to fill. Despite restaurateurs’ best efforts to open new locations in the city, the lack of suitable commercial spaces is leaving many disappointed.
Thankfully, however, the construction industry is responding to the shortage. According to an article from the city’s local news provider, Energetic City, the number of building permits issued this year stands at double the figure posted during the same time in 2013. As would be expected, commercial developments took the lion’s share of the pie:
"The value of construction in Fort St. John continues to forge ahead of last year’s pace, as 30 permits issued last month, added up to $18.7 million.
Six of the permits were for commercial developments, including the construction of a new hotel on the Alaska Highway, and they represented the biggest slice of the total value, at 11.7 million.
The April total nearly doubled the total for the same month last year, which was 9.8 million, and was also generated from a total of 30 permits."
The shortage in supply is working to the advantage of real estate investors, however. The capitalization rate on commercial properties stands just north of 8.5 percent, treating investors to the promise of great returns. Lagging just slightly behind, residential properties are similarly attractive, with the cap rate for rental houses and duplex homes topping a respectable eight percent.
With real estate in Fort St. John in such high demand, the market for commercial property investments is expected to be bullish, a boon for early investors who are able to purchase property from a reliable REALTOR®, like Scott Sauer.
(Source: Building permits already double this time last year in Fort St. John, Energetic City, May 6, 2014)