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

Shuswap Community Foundation grants support youth projects

Karen Angove Endowment Fund to benefit Shuswap Area Family Emergency (SAFE) Society

Shuswap resident seeks return of jewelry box containing father’s cremated remains

Sicamous RCMP report handmade box was stolen from a storage locker

Radon levels in new Salmon Arm home a concern

Real-time monitoring shows radon concentration just within federally accepted guideline

Salmon Arm family doctor shortage putting health-care needs at risk

City clinics report having long wait lists, not accepting new patients

Gym enthusiasts invited to get in gear for kids

Spin4Kids Saturday at GoodLife Fitness

North Okanagan mom cherishes life-saving alert dog

Carrie Lemay, single mom and a diabetic, welcomed Freckles, an alert guide dog, into her life

UBC Okanagan, RCMP collab for study on reporting child abuse

A fundraising gala will present a UBCO psych student’s research on how and when abuse is reported

Dream funds serve up dream kitchen for Okanagan organization

CMHA upgrades space thanks to Kalamalka Dream Auction donation

‘It’s been 12 years’: Father of murdered B.C. real estate agent pleads for mayor’s help

Lindsay Buziak was stabbed to death on Feb. 2, 2008 in Saanich. Her case is unsolved.

Province commits to supporting Indigenous tourism growth in B.C.

The Indigenous Tourism Accord signed during conference in Kelowna

Penticton’s OSNS benefits from $10,000 RBC grant

The OSNS Child and Youth Development Centre will use the money for tech upgrades

B.C. First Nation Chief Ed John faces historic sex charges

John served as minister for children and families under then-premier Ujjah Dosanjh

Vernon councillor suggests homeless set up camp at city hall

Overnight camping in city parks is only permitted between dusk and 9 a.m. in specific parks

Most Read