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

One of B.C’s last surviving strip clubs baring all again for Christmas charity

25th annual event is Sunday and raises money for the Maple Ridge-Pitt Meadows Christmas Hamper Society.

Freshco opens in Maple Ridge on Thursday

Free eggs for first 500 customers

Early morning crashes slow Maple Ridge commute

Two on Lougheed, one on Dewdney Trunk Road

Maple Ridge councillors wonder, just how fast is RapidBus?

It will be quicker than current bus service, TransLink promises

PHOTOS: Chamber recognizes best in business nominees at Christmas luncheon

Winners will be awarded at annual gala in February

VIDEO: Rockslide closes Highway 93 in Fairmont Hot Springs

Geotechnical team called in to do an assessment after rocks fell from hoodoos

Province ‘reinforcing’ new rules for party buses as holiday season approaches

Ministry reminds the public that it’s against the law to consume alcohol, cannabis inside a vehicle

Man charged after alleged ‘violent’ robbery at SkyTrain station

41-year-old Aaron Sutherland, of no fixed address, is ‘well known to police’

University of Victoria researchers develop industry-changing ‘hyper-glue’

‘Cross-linking’ technology already playing a role in performance body armour

Threats to the Fraser River at ‘new zenith,’ says river conservationist

The ‘Heart of the Fraser’ should be deemed ecologically significant according to ORC statement

Grandparents raising children: Shuswap grandma sees need for support

Peer group formed for those who have unexpectedly taken on the role of parenting

Final appeal rejected for man convicted in deaths of missing Alberta seniors

Lyle and Marie McCann were in their 70s when they left their home in St. Albert in 2010 and vanished

Thieving gun-toting Santa breaks into Princeton restaurant, makes icing sugar sandwich

The suspect allegedly made a sandwich of icing sugar and ham

Infants should be tested for autism if older siblings are diagnosed, Canadian study suggests

Blood test for infants with sibling who’s been diagnosed would get information to families earlier

Most Read