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Housing Forecast Q3 2018

Multiple Listing Service® (MLS®) residential housing sales in the province are forecast to decline 9 per cent to 94,200 units this year, after posting 103,700 unit sales in 2017. MLS® residential sales are forecast to remain relatively unchanged in 2019, albeit down 0.2 per cent to 94,000 units. Housing demand is expected
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Bank of Canada Interest Rate Announcement – May 30, 2018

Bank of Canada Interest Rate Announcement – May 30, 2018

The Bank of Canada decided to leave the target for the overnight policy rate unchanged at 1.25 per cent this morning. In the statement accompanying the decision, the Bank noted that inflation has been close to its two per cent target and will likely be higher in the near term than was previously forecast due to higher gasoline prices. Economic growth in the first quarter was stronger than expected due to rising exports and business investment, which helped to offset a B20 induced softening in housing activity. Overall, the Bank’s view is that higher interest rates will be warranted to keep inflation near its target.
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The Devastating Effects of a Housing Price Shock in BC

BC Housing Price Shock OverviewThe desire of some well-meaning British Columbians for government to drive down the price of homes through demand-side policy may sound practical at first blush. However, when you consider the broad and deep economic toll that a negative housing price shock would exact on both homeowners and renters, it quickly becomes apparent that such an approach is at best, a mug’s game. British Columbia Real Estate Association (BCREA) Economics analysis shows that even a relatively modest negative housing price shock will produce significant consequences to the BC economy.
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8 Facts You Must Know About the New Speculation Tax

British Columbia is on the verge of a new speculation tax.  Here are the 8 Facts You Must Know About the Speculation Tax:

1. All foreign buyers will be paying the tax. Foreign owners and satellite families — households with high worldwide income that pay little income tax in B.C. — will be captured by the tax and will not be eligible for a primary residence exemption.
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Housing Demand to Slow Through 2019

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 8.6 per cent to 94,855 units this year, after recording 103,763 residential sales in 2017. MLS® residential sales are forecast to edge back a further 1 per cent to 94,025 units in 2019. Housing demand is expected to remain above the 10-year average of 84,800 units into 2020.
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Mortgage Rates Steady…For Now

Mortgage Rate Outlook

Canadian mortgage rates have continued 2017’s upward trend. The five-year qualifying rate for insured mortgages bumped up 15 basis points to 5.14 per cent while discounted rates offered by lenders increased similarly to 3.39 per cent. The increases were driven by the earlier than expected rate increase by the Bank of Canada in January. The Bank has now raised interest rates three times since last summer, with its key policy rate sitting at 1.25 per cent.
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Bank of Canada Interest Rate Announcement – March 7, 2018

The Bank of Canada opted to maintain its target for the overnight interest rate this morning at 1.25 per cent.  In the statement accompanying the decision, the Bank noted that although growth in the Canadian economy slowed more than expected in the fourth quarter of 2017, the economy is expected to operate at capacity going forward. The bank cited recent trade policy developments, mainly the threat of a trade war with the United States, as a significant risk to its outlook for growth and inflation.
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Canadian Housing Starts – February 8, 2018

Canadian Housing Starts – February 8, 2018

Canadian housing starts began the year essentially flat on a monthly basis at 216,210 units at a seasonally adjusted annual rate (SAAR). The six-month trend in Canadian housing starts remained elevated at 224,865 units SAAR.

BC saw total housing starts fall 16 per cent to 41,648 units SAAR in December on a monthly basis. However, total starts in BC were up 59 per cent year-over-year. Single detached starts were up 1 per cent on a monthly basis but increased 78 per cent compared to January 2017 while multiple starts were down 21 per cent month-over-month and were 54 per cent higher year-over-year.

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Bank of Canada Interest Rate Announcement – January 17, 2018

Bank of Canada Interest Rate Announcement – January 17, 2018

The Bank of Canada opted to raise the target for its overnight interest rate this morning 25 basis points to 1.25 per cent. In the statement accompanying the decision, the Bank cited recent strong economic data and rising inflation as motivations for the rate increase. The Bank expects growth in the Canadian economy to slow to 2.2 per cent in 2018 and 1.6 per cent in 2019 with consumption and new home construction contributing less to growth than in years past.
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Growth Continues in BC Commercial Real Estate Sector

The BCREA Commercial Leading Indicator (CLI) increased for the ninth consecutive quarter, rising 2 points in the third quarter of 2017 to 135.3. That increase represents a 1.7 per cent rise over the second quarter and a 7.3 per cent increase from one year ago.

The sustained rise in the CLI has been driven by several years of strong growth in the BC economy, particularly in sectors beneficial to commercial real estate activity. While BCREA expects that the almost unprecedented cycle of above trend growth in the BC economy will end next year, the overall economic environment remains very supportive of growth in investment, leasing and other commercial real estate activity over the next two to four quarters.
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