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)

Provincial real estate body warns of ‘cracks’ in Canadian economy in 2019

British Columbia Real Estate Association (BCREA) 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

Sooke Food Bank sends out call for help

Need continues as holiday season food drives are over

Saanich Police ask for help locating missing high-risk youth

Robyn Coker-Steel has not been in contact with anyone from her home since Dec. 27

Some 500 people attend Sidney vigil for victims of Iran airplane crash

All 176 passengers, including 57 Canadians, died when Flight PS752 crashed

Warm ‘blob’ could be behind mass starvation of North Pacific seabirds: Study

Unprecedented death toll raises red flag for North American marine ecosystems

VIDEO: Soldiers trade rifles for snow shovels to help dig out St. John’s

A state of emergency is set to extend into a fifth day

Power lines cut as thieves strike Vancouver Island veterinary hospital

‘Thankfully there weren’t any animals or staff in the clinic when this happened’

ICBC to bring in ranking system for collision, glass repair shops

Change comes after the much-maligned auto insurer has faced criticism for sky-high premiums

Surrey’s ‘Pink Palace’ being used for Stephen King horror shoot

New web series based on King’s The Stand novel

‘It was just so fast’: B.C. teen recalls 150-metre fall down Oregon mountain

Surrey’s Gurbaz Singh broke his leg on Mount Hood on Dec. 30

Vancouver Island Pride weekend returns to Mount Washington Alpine Resort

Building on the success of last year’s family-friendly pride festival on Vancouver… Continue reading

Scarlett Point lighthouse keeper wins a million bucks playing the lottery

“I usually just get a quick pick, so I didn’t expect to win a big prize”

B.C. woman crowned the fastest female marathon runner in Canadian history

Malindi Elmore ran an incredible 2:24:50 at the Houston Marathon

Alberta bulldog breeder ordered to refund B.C. buyer over puppy’s behaviour

Tribunal ruled a verbal agreement to send a new dog superseded the written contract

Most Read