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

Warrant issued for Chilliwack prolific offender

Do not attempt to apprehend David Allen Geoghegan, 29, police caution

Chilliwack family’s dog missing after using online pet-sitting service

Frankie the pit bull bolted and hit by a car shortly after drop off through Rover.com

VIDEO: New supportive housing in Chilliwack almost ready to welcome residents

Grand opening Friday saw dignitaries join with health, policing, and housing reps on Trethewey

Man who once killed a fellow inmate convicted of threatening guard at Kent

No prison time for threat nine years after MMA-style beating death in Maple Ridge

BREAKING: Vehicle fire on Highway 1 between Chilliwack and Abbotsford

One westbound lane blocked after 11:30 a.m. on Friday leading to traffic delays

Listening to Christmas music too early could affect your mental health

Linda Blair, a clinical psychologist, says preemptive Christmas music can trigger anxiety

Port Alberni mom takes school district to court over Indigenous smudging, prayer in class

Candice Servatius, who is an evangelical Christian, is suing School District 70

Body found after SUV found fully engulfed in flames in Abbotsford field

The Integrated Homicide Investigation Team have been called in

Family of B.C. man killed in hit-and-run plead for tips, one year later

Cameron Kerr’s family says the driver and passengers tried to cover their tracks

Princeton couple pays for dream vacation with 840,000 grocery store points

It’s easy if you know what you are doing, they say

B.C. wildlife experts urge hunters to switch ammo to stop lead poisoning in birds

OWL, in Delta, is currently treating two eagles for lead poisoning

B.C. First Nations drop out of court challenge, sign deals with Trans Mountain

Upper Nicola Band says deal represents a ‘significant step forward’

VIDEO: B.C. man trapped under ATV for days shows promise at Victoria hospital

Out of induced coma, 41-year-old is smiling, squeezing hands and enjoying sunshine

Most Read