Townhouse construction in the Lower Mainland. (Black Press)

Townhouse construction in the Lower Mainland. (Black Press)

Housing slowdown forecast to cool B.C. economy

Conference Board says pipeline, trade uncertainty affecting investment

The B.C. and federal government’s efforts to cool an overheated urban housing market are working, and that’s among the factors leading to a slowdown in B.C. economic growth, the Conference Board of Canada says.

The board’s latest provincial outlook predicts “weaker but still above-trend” growth of 2.1 per cent for 2018 and 2019, after growth above three per cent between 2011 and 2017. It calculates that one third of that growth was due to residential housing investment.

“The double-digit increases in B.C. housing starts in 2015 and 2016 were linked to several factors, including rock-bottom mortgage rates, rapid population growth and tight supply,” the report says. “The pace of expansion was unsustainable, and new tighter mortgage rules and several housing market taxes implemented in the provincial government’s 2018 budget have resulted in a sharp slowdown in activity.”

The B.C. Liberal opposition has been focusing on the projected decline in housing starts, which was also forecast in Finance Minister Carole James’ latest quarterly report.

“Unemployment rates in B.C. remain low, but that’s because the NDP has added 20,000 public sector jobs,” said Shuswap MLA Greg Kyllo, jobs, trade and economy critic for the B.C. Liberals. “From Statistics Canada to this Conference Board report, all signs are showing that we’re on the brink of a real economic downturn here in British Columbia.”

A “speculation tax” on vacant homes in the tightest urban markets is set to take effect in 2019, based on 2018 property values. Local politicians from some of the affected cities, including Metro Vancouver, Kelowna, West Kelowna, Greater Victoria and Nanaimo, called on the province to let cities decide housing taxes, but James said the tax will go ahead as planned.

RELATED: James unmoved by speculation tax concerns

RELATED: B.C. urban housing market ‘moderating’

While home sales in B.C. have slowed considerably, prices were still rising in July, the latest Statistics Canada figures show. The average cost for a new B.C. home rose 1.3 per cent in July. The increase for Victoria was 1.4 per cent and in Kelowna it was 2.0 per cent, compared to 0.5 per cent nationally.

Trade tensions with the U.S. are another factor in slowing economic growth for B.C., the Conference Board concludes.

“The slower growth will be a result of tight labour markets restraining employment growth and of the uncertain outlook for trade and investment attributable to an escalating global trade war and difficulties in obtaining approval for pipelines and liquefied natural gas export facilities throughout the province,” the report says.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC HousingBC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Eli, left, Brent, Lindsay and Ava Wilson. (Photo courtesy of Lindsay Wilson)
West Shore families share experience in raising a child with autism

Two families reveal some parallels, but circumstances are different for everyone

Kit Thornton, chief aquarist at the Shaw Centre for the Salish Sea, plays with Wanda, the female Giant Pacific octopus currently residing at the centre. The centre will release Wanda back into the wild next month. (Wolf Depner/News Staff)
An octopus named Wanda will soon say goodbye to Sidney

Wanda’s personality is ‘complete opposite’ of previous octopus named after Dr. Bonnie Henry

Hamels Fabrics & Quilting is set to open on April 6 in Sooke. The shop is located at 2044 Otter Point Road. (Mark Martins/Pixabay)
Fabric and quilting store opens doors in Sooke

Shop is filled with all kinds of ‘bright, bold and cheery’ designs

Saanich Fire Department on the scene after a car crashed into the Walmart in Uptown. (Photo courtesy Dan Wood)
PHOTOS: Saanich firefighters free trapped workers at Uptown Walmart

Incident reported as explosion after driver rammed through wall

Tiny packets of carrots ready to be distributed in Victoria. (Submitted/Victoria Seed Share)
Free Victoria seed sharing collective bags work experience funding

Fully volunteer run Victoria Seed Share will get a boost from provincial grant

B.C. Health Minister Adrian Dix and Premier John Horgan describe vaccine rollout at the legislature, March 29, 2021. (B.C. government)
1,262 more COVID-19 infections in B.C. Friday, 9,574 active cases

Province’s mass vaccination reaches one million people

Organ donation form from BC Transplant. (BC Transplant)
POLL: Have you registered as an organ donor?

They number 1.5 million strong and growing. But their numbers still fall… Continue reading

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of April 6

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Librarian Katie Burns with the Fraser Valley Regional Libraries poses for a photo in Chilliwack on June 18, 2019. Monday, April 12, 2021 is Library Workers’ Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of April 11 to 17

Library Workers Day, That Sucks! Day, and Wear Your Pyjamas to Work Day are all coming up this week

Nanaimo RCMP are asking for the public’s help in identifying the man suspected of being involved in a stabbing. (Photo submitted)
Nanaimo RCMP trying to identify stabbing suspect who wielded rusty knife

Stabbing followed argument between two men at Port Place Shopping Centre April 1

The inside of the Campbell River Community Centre gymnasium has been marked off in order to facilitate the public flowing through the clinic as they receive their COVID-19 vaccination. Photo by Alistair Taylor – Campbell river Mirror
Leftover vaccines go into arms, not down the drain: Island Health

Immunization plan comes with built-in options for any unused vaccines at the end of the day

A man wears a face mask past the emergency department of the Vancouver General Hospital. (THE CANADIAN PRESS/Jonathan Hayward)
Calls for stricter action in B.C. as COVID-19 variants projected to climb

Jens von Bergmann says the province has taken a ‘wait and see’ approach when early action is needed

Vancouver’s park board general manager issued a new order Friday restricting tents and other temporary structures from being set up in Strathcona Park after April 30, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver park board issues order to restrict tents in Strathcona Park

The order issued Friday restricted tents and other temporary structures from being set up after April 30

Vancouver Canucks general manager Jim Benning says the players who’ve tested positive for COVID-19 are recovering and the team still intends to play a 56-game season. THE CANADIAN PRESS/Darryl Dyck
Canucks players ‘mostly on the other side’ of COVID outbreak: general manager

The athletes have had a “whole range” of COVID-19 symptoms, said team physician Dr. Jim Bovard, but no one has needed to be hospitalized

Most Read