Last Updated on October 24, 2023 by Ephraim Vecina
British Columbia’s moderating housing market will have a domino effect of overall weakness in the provincial economy, the Conference Board of Canada predicted in its study released last week.
Some ongoing energy megaprojects might help alleviate some of the pain, according to the analysis. Among the most promising of these is a $40-billion project based in Kitimat, B.C. by LNG Canada and five investment partners.
“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 report, as quoted by Business in Vancouver.
Nevertheless, the market should still brace for considerable real GDP growth slowdown, with housing likely to drag down the economy well into next year.
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The Board warned that the province’s economy will shrink from 2.6% in 2018 to 2.5% this year, and then down to 2.4% in 2020. These would be noticeably lower than the 2014-17 period, which enjoyed an average of 3.2% growth.
Said slowdown will make itself especially felt in the largest cities, which endured the brunt of weaker housing activity. Data from the Real Estate Board of Greater Vancouver showed that the region’s sales numbers suffered an annual decline of 39.3% in January, down to 1,103 completed deals.
Much of the blame has been cast upon B-20, which introduced a severely tightened mortgage lending stress test at the beginning of last year.
Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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