Tepid B.C. housing market to drag down provincial economy

This is despite several large-scale projects by the energy industry

Tepid B.C. housing market to drag down provincial economy

British Columbia’s steadily cooling housing market will most likely hamper its economy well into 2020, according to the Conference Board of Canada’s latest outlook released this week.

The province’s real GDP growth will likely shrink from 2.6% in 2018 to 2.5% this year, and further down to 2.4% in 2020 “despite ongoing megaprojects in the energy sector.”

Said figures run in stark contrast to a golden period of stronger-than-usual growth from 2014 to 2017, which saw an average of 3.2%. Much of this accelerated pace could be attributed to demand for B.C.’s real estate, which ground to a relative crawl after the implementation of extremely tight mortgage lending regulations at the beginning of last year.

The slowdown was especially apparent in the large metropolitan markets. Data from the Real Estate Board of Greater Vancouver indicated that the region’s sales activity fell by 39.3% year-over-year in January, down to just 1,103 transactions.

Read more: B.C. real estate tax policies working as intended – Finance Minister

The Conference Board of Canada is seeing a ray of hope, however: Among the aforementioned energy megaprojects is a $40-billion plan under the auspices of LNG Canada and its five investment partners, with the eventual facility to be based in Kitimat, B.C

“With the housing market slowing, investor approval of LNG Canada’s liquefied natural gas terminal and pipeline in late 2018 came at an opportune time for the province. The first phase of the development will provide a substantial boost to the province’s real GDP between now and the middle of the next decade,” the Board stated in its outlook, as quoted by Business in Vancouver.