# Prince Rupert



## vi123 (Oct 29, 2015)

Has anyone else here invested in Prince Rupert? 

We bought a couple of houses up there last year. Still waiting for the news on whether Petronas goes ahead with their LNG project. Based on the noises coming out of Malaysia, it looks like it's going to go ahead as soon as the environmental approval comes through.

Real estate in Prince Rupert has done quite nicely over the past year, but the real performance will come if/when 5000 workers arrive in town to build the LNG trains.


----------



## AltaRed (Jun 8, 2009)

The key word here is "IF". LNG projects depend tremendously on oil prices because that is what LNG is priced off of in Asia. LNG is also a lot cheaper to make and transport from Papua New Guinea, Indonesia and Australia than it is from Canada. IOW, I will believe it when I see it.


----------



## vi123 (Oct 29, 2015)

AltaRed said:


> The key word here is "IF". LNG projects depend tremendously on oil prices because that is what LNG is priced off of in Asia. LNG is also a lot cheaper to make and transport from Papua New Guinea, Indonesia and Australia than it is from Canada. IOW, I will believe it when I see it.


Absolutely correct. That's why real estate prices aren't much higher there already.

The advantage that this project has is the ownership by entities from China, Japan, India and Brunei. So a lot of the LNG is effectively pre sold. And given the weak loonie and unemployment in Alberta, it will probably never be cheaper to build.


----------



## UCF (Nov 26, 2015)

Canfisco just announced the closing of the cannery, which is around 500 jobs in a city of about 12-13000. That's not great news and will not help real estate values. The city needs a break, been a rough slog up there the last decade or so.


----------



## Future Money-Bags (Feb 23, 2010)

I used to live In P.R. sadly enough, and it has become much worse since I moved away 15 years ago.
I recently heard about a condominium complex that may be built there if it is approved, but there is definitely the problem of finding tenants.

Make sure to do more research than just hoping for the pipeline to be built, until than, you need rental income.
Let me know if you decide to go for it, I have family up there.


----------



## vi123 (Oct 29, 2015)

Future Money-Bags said:


> I used to live In P.R. sadly enough, and it has become much worse since I moved away 15 years ago.
> I recently heard about a condominium complex that may be built there if it is approved, but there is definitely the problem of finding tenants.
> 
> Make sure to do more research than just hoping for the pipeline to be built, until than, you need rental income.
> Let me know if you decide to go for it, I have family up there.


Yes we bought a couple of places up there in 2014, over in the West end of town. Rented to professionals.

Its not just LNG driving it. Also the port expansion, and the fact it was so undervalued previously.


----------



## steve41 (Apr 18, 2009)

Born in PR in 1941. Left 2 years later. Never been back.


----------



## vi123 (Oct 29, 2015)

steve41 said:


> Born in PR in 1941. Left 2 years later. Never been back.


So I guess you haven't seen the giant statue of Pierre Trudeau that they erected on Graham Avenue?


----------



## wolf (Feb 2, 2016)

vi123 said:


> So I guess you haven't seen the giant statue of Pierre Trudeau that they erected on Graham Avenue?


Are you kidding? I mean honestly a statue of PT in Prince Rupert. Why?


----------



## steve41 (Apr 18, 2009)

I remember my parents telling me that one year it rained 250 days out of the 365.


----------



## rossco12 (Dec 4, 2013)

As someone who has spent considerable time working in Kitimat on a large LNG project, the best input I can give is to pay very close attention to local politics and public opinion as to the mass influx of workers. 

I first arrived in Kitimat near the end of 2013, and spent the better part of the next 6 months sharing an aging 2 bedroom apartment with a coworker at the expense of my employer, and ultimately the client. That expense was reportedly $3000 a month. Other buildings in the complex were recently renovated and charged $3500 monthly. It was a full on rental boom. People were renting $150 000 houses for $4000 a month. There wasn't a hotel or apartment vacancy in the whole town. Workers had to stay in Terrace.
Every bar and restaurant was packed. When Mr. Mikes opened, there was a 1 hour wait to get a seat for the first 3 weeks. Property values skyrocketed. Money was flowing into that town and into local pockets like crazy.

After about 15 months away from Kitimat, I returned this January to discover it had all changed. Public outcry over the "rif-raf" trashing the town, overwhelming the local hospital and law enforcement, as well as the skyrocketing cost of living for average long time locals and renters killed a very large component of the boom.

Now, those apartments are empty or rented for peanuts, all us imported workers stay in camps owned by Civeo or Horizon North, eating food trucked in straight to the camp kitchen, far too tired from working 90 hour weeks to go out and spend money in a bar or restaurant. The flow of money is now much more streamlined. Into the town, out of the town. Much, much less is left behind for real estate investors.


----------



## vi123 (Oct 29, 2015)

rossco12 said:


> As someone who has spent considerable time working in Kitimat on a large LNG project, the best input I can give is to pay very close attention to local politics and public opinion as to the mass influx of workers.
> 
> I first arrived in Kitimat near the end of 2013, and spent the better part of the next 6 months sharing an aging 2 bedroom apartment with a coworker at the expense of my employer, and ultimately the client. That expense was reportedly $3000 a month. Other buildings in the complex were recently renovated and charged $3500 monthly. It was a full on rental boom. People were renting $150 000 houses for $4000 a month. There wasn't a hotel or apartment vacancy in the whole town. Workers had to stay in Terrace.
> Every bar and restaurant was packed. When Mr. Mikes opened, there was a 1 hour wait to get a seat for the first 3 weeks. Property values skyrocketed. Money was flowing into that town and into local pockets like crazy.
> ...


Very interesting feedback, thanks.

PR has done very little in the way of preparation for the anticipated supply of workers, so I think there may well be a similar real estate boom to the one you describe. I see that the median price in Kitimat doubled between Jan '13 and Jan '15, before drifting slightly lower. In the short-term, PR has nowhere to put these workers. Longer-term, things might slow down when the camps are built.

One thing that you don't mention is that the Rio Tinto project ended in late 2014. Plus a bunch of the LNG projects have been delayed or cancelled recently. Could that be at least one part of the reason why there are vacancies?


----------

