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

Just Posted

Cowichan Valley Capitals open their 2019 training camp

The Caps are back. The Cowichan Valley Capitals opened their fall training… Continue reading

Business notes: Realtor steps up to sponsor young dancers

Christine Ryan, a Realtor with Sotheby’s International Realty, knows what it takes… Continue reading

Indigenous voices to take centre stage at Cowichan Valley festival

From Sept. 7-8, you can listen to Indigenous voices at third annual Koksilah Music Festival

MacDowell rugby camp coming to Cowichan next week

Six Canadian senior rugby sevens players and six U20 players will be… Continue reading

Woman thought she’d die trapped in her backyard shed

Jessica McCauley kept her cool and worked her way out

Trudeau vows to stand firm against ‘increasingly assertive’ China

China has accused Canada of meddling in its affairs

$5-million lotto ticket sold in Nanaimo

Someone matched all six numbers in Wednesday’s 6/49 draw

Vancouver Island father says he attempted suicide a month before murders

Andrew Berry takes stand in his defense for December 2017 deaths of young daughters

‘Plenty of time for a deal’: Teachers’ union expects kids back in school on Sept. 3

BCTF says class size, composition at the heart of the issue

Province funds new shuttle buses for 13 B.C. senior centres

Activity, socializing helps maintain health, Adrian Dix says

BREAKING: Province approves Surrey police force

Minister of Public Safety Mike Farnworth green-lights city’s municipal police force

Thermal imaging cameras eye Salish Sea in hopes of better detecting whales

Cameras installed at BC Ferries’ terminal on Galiano Island, and off southern Gulf Islands

Police watchdog investigating two officers after Langley teen’s suspected overdose

According to IIO, two officers were deployed to help Carson Crimeni but did not locate him before he died

B.C. father tells judge he did not kill his young daughters

Andrew Berry pleaded not guilty to the December 2017 deaths

Most Read