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

Hospital patient pleads guilty to dumbbell assault of nurse in Abbotsford

Neale Heath admits to assault causing bodily harm in attack last September

VIDEO: Asphalt plant protest takes place outside Mission City Hall

Group from Steelhead oppose proposed project, want public hearing reopened

Westbound Highway 1 roll-over crash slowing commuters in Abbotsford

Accident occurred just west of Mt. Lehman Road, left lane blocked

World-renowned violinist to perform at Abbotsford prison

Gidon Kremer’s concert on Jan. 29 is part of Looking at the Stars’ program

Suspected dine-and-dasher who pulled gun on staff arrested by Abbotsford police

Police recognized man from description of neck and arm tattoos

Protesters block entrance to Victoria government building to support Wet’suwet’en First Nation

A letter with four demands was delivered to the Ministry of Energy, Mines and Petroleum Resources

VIDEO: Langley woman without a home after houseboat sinks during snowy weather

A Go Fund Me page has been set up to help the Grant’s Landing resident replace her possessions

Boy, 13, arrested after alleged assault involving girl at B.C. middle school

Boy alleged to have used ‘inappropriate levels of force’ to injure the girl

‘Epic sky palace’: B.C. businesses help create dream treehouse for boy recovering from cancer

‘It was kind of a bright shining beacon at the end of a horrible, dark tunnel’

VIDEO: Nickelback gears up for nostalgia tour

Canadian band joins Stone Temple Pilots for a summer tour that includes just one stop in Canada

B.C. teacher suspended for poking student in stomach, pulling another’s ponytail

Teacher also swore in classroom, used Facebook to contact students

Larry Walker Jr. and Sr. keeping expectations low for hall-of-fame induction

Walker needs 75 percent of votes in order to be inducted into Cooperstown

Gene Simmons to launch new Titans of Rock music festival in Grand Forks

The rock legend has partnered with Chuck Varabioff to run Titans of Rock in Grand Forks

Most Read