With sales down, total active listing rose nearly 31 per cent to 33,500 units in November, compared to the same month last year. This said, active listings for the month of November 2017 were at their lowest level in more than 15 years. (Pixabay.com)

B.C. real estate body warns of ‘cracks’ in Canadian economy in 2019

British Columbia Real Estate Association predicts Bank of Canada won’t meet interest goals

The body representing the provincial real estate industry warns of “cracks” in the Canadian economy.

Cameron Muir, chief economist of the British Columbia Real Estate Association (BCREA), made that observation in the organization’s mortgage rate forecast for December 2018.

RELATED: Victoria in Canada’s top three cities for highest household debt

“The most recent quarter of Canadian GDP data was, on the surface, relatively strong, showing that the economy expanded at a 2 per cent annual rate,” he said. “However, the underlying data was far less encouraging. Household spending slowed, residential investment fell 1.5 per cent and business investment also declined following six consecutive quarterly increases.”

The report sounds especially concerned about the state of the Alberta’s oil industry. A lack of pipeline capacity has prompted a build-up of inventory, causing prices of Western Canada Select oil to drop.

The “deep discount” for Western Canada Select oil is one of the reasons why BCREA appears “skeptical” that the Bank of Canada will succeed in raising its interest rate — which sets the rate for all other interest rates — to a ‘neutral’ level of three per cent over the medium term.

“However, other cracks in the economy are starting to appear as well, including the highly publicized closing to GM’s Oshawa plant, which will have a material impact on growth in Ontario,” said Muir. “Those factors, along with a slowing housing market across Canada and a potentially sharp slowdown in US economic growth next year, may give the Bank pause.”

The Bank of Canada, in other words, may refrain from measures that could further stall an economy that appears to be slowing down anyway.

RELATED: ‘Subdued’ housing market predicted in B.C. through 2021: report

Looking at provincial figures for November, they confirm the slowing house market. According to the BCREA, November 2018 sales dropped 33.1 per cent cent from the same month last year to 5,179 units sold, with sales volume declining 34.3 per cent to $3.7 billion.

With sales down, total active listing rose nearly 31 per cent to 33,500 units in November, compared to the same month last year. This said, active listings for the month of November 2017 were at their lowest level in more than 15 years.

Notably, prices barely budged, dropping 1.9 per cent to an average of $718,903.

“BC households continue to struggle with the sharp decline in purchasing power caused by the B20 mortgage stress test,” said Cameron Muir, BCREA Chief Economist. “Most BC regions are now exhibiting relative balance between supply and demand.”

Year-to-date, BC residential sales dollar volume was down 23.1 per cent to $53.4 billion, compared with the same period in 2017. Residential unit sales declined 23.6 per cent to 74,847 units, while the average residential price was up 0.7 per cent to $713,302.


Like us on Facebook and follow us on Twitter

wolfgang.depner@saanichnews.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Citing stability, B.C. Premier calls snap election for Oct. 24

John Horgan meets with Lieutenant Governor to request vote

B.C. Premier announces fall election

Kootenay East MLA Tom Shypitka reacts to election announcement

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 20 to 26

Rabbit Day, Hobbit Day and One-Hit Wonder Day are all coming up this week

Interior Health reports three additional COVID-19 cases in region

The number of cases in the region since the beginning of the pandemic are now at 492

UPDATE: Fire above Sparwood no threat to community

Mayor David Wilks reported it may be due to an exposed coal seam

COVID-19: 4 more deaths, 366 new cases in B.C. since Friday

A total of 8,208 people in B.C. have tested positive for COVID-19 since January

Vancouver Island sailor stranded in U.S. hospital after suffering massive stroke at sea

Oak Bay man was attempting to circumnavigate the world solo

Majority needed to pass COVID-19 budget, B.C. premier says

John Horgan pushes urgent care centres in first campaign stop

Public health officials urge Canadians to limit contacts again as COVID-19 cases rise

Canada has committed $1 billion to buy at least 154 million doses of vaccines from five different companies

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Vancouver Island family overwhelmed with 14 Lab puppies

Litter may be one of the biggest ever

B.C. could be without a new leader for multiple weeks after Election Day: officials

More than 20K mail-in voting packages were requested within a day of B.C. election being called

First full day of B.C.’s election campaign begins amid COVID-19 pandemic

B.C. Liberal Leader Andrew Wilkinson and the Green party’s Sonia Furstenau criticized John Horgan’s decision

Most Read