Apartment vacancy rates in Dawson Creek and Fort St. John are once again the highest in British Columbia according to new data from Canada’s housing agency, but local real estate professionals are divided on whether the numbers accurately reflect the market.
The Canada Mortgage and Housing Corporation (CMHC) blamed low oil prices and oversupply for climbing vacancy rates in Fort St. John and Dawson Creek in its annual rental market survey, released Nov. 28.
Dawson Creek recorded an overall rental vacancy rate of 19.1 per cent in October, 4.5 points higher than the same time last year.
Fort St. John, meanwhile, saw its vacancy rates surge from 12.1 per cent to 30.7 per cent. At 34.8 per cent, the town’s vacancy rate for one-bedroom apartments was the highest single rate in the province.
Downtown Prince George was a distant third, with a vacancy rate of just 5.6 per cent.
Peace Region rents declined slightly with rising vacancies, from an average $975 a month for all apartment types in Dawson Creek to $923, and $1,031 to $962 in Fort St. John. That puts both cities on par with Kelowna, which had average rents of $976. The average apartment in Vancouver, meanwhile, sat at $1,223.
CMHC ‘out to lunch’
However, there is debate among local real estate professionals over whether the CMHC numbers accurately reflect vacancies in the region.
Doug Scott, a residential real estate investor in Dawson Creek, was skeptical of the CMHC numbers.
“In general with CMHC numbers, they’re so out to lunch,” he said.
Scott said CMHC figures don’t respond quickly to market conditions, which can change depending on gas plant construction, drilling schedules and pipeline approvals.
“By they time they do their survey and gather their report and put it to press, they’re always three months back,” he said. “Three months ago, there was substantial vacancy, but things turned around quickly.”
Scott, who has around 200 rental properties in the city, said market conditions were still soft, but “we’re going the other direction. We’re climbing out of the hole. I’ve never seen the town busier.”
Lita Powell of Fort St. John’s Li-car Management Group, however, said the numbers were “bang on.”
In fact, the CMHC might be underestimating Fort St. John’s vacancy rates, she said.
“The real vacancy in Fort St. John is much closer to 35 per cent,” she said. “The CMHC vacancy rate misses a substantial number of units,” including any buildings smaller than eight units.
“When you consider the number of duplex units built in the past four years in Fort St. John, I suspect they make up a substantial number of the vacancies,” she said.
Speculation over Site C and oil and gas projects triggered a residential building boom that has left the Fort St. John rental market over supplied, Powell said. While the economy may be recovering, the majority of new hires are people living in the community who were unemployed, she said. There simply aren’t enough of those workers to fill all the new rental units on the market.
“Although it is getting busier, all that’s happening is those unemployed people are going back to work. No one is moving into the community to fill the vacancies,” she said.
Powell added that Site C dam construction is having almost no impact on the local rental market because the majority of workers are living in the construction camp on-site.
“Why anybody would have thought the building of Site C would be a boon for Fort St. John completely baffles me,” she said. “BC Hydro has never promised in all of the years since Site C first showed up on their books...that they would house their workers in the municipal boundaries, they never promised they would hire local.”