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8/18/2019 Economic Analysis of British Columbia
1/14
Economic Analysis of British ColumbiVolume 36 • Issue 2 • April 2016 | ISSN: 0834-3980
1
Highlights• Robust B.C. house sales and rising prices
continue through 2018
• B.C. median value climbs 10 per cent in 2016,
transactions reach record level
• Metro Vancouver demand and surging prices
underpin provincial momentum
• Strong price growth for detached homes in
Metro Vancouver to persist
•
Vancouver Island momentum on the rise• Northern and interior B.C. market activity
constrained by weak commodity sector
Summary
The vigour of B.C.’s housing market has continued to
surprise with sales and price growth far outpacing our
previous outlook. With a strong economic backdrop
and low mortgage rates underpinning activity, hous-
ing market momentum will drive a record 109,500
resale transactions in the province this year, with me-
dian price growth of 10 per cent. Gains will primarily
reflect red-hot conditions in Metro Vancouver and
higher demand on Vancouver Island, as other regions
are hampered by weak commodity prices.
We expect robust demand to continue through 2016,
with only a small drop in sales over the next two
years. Housing price growth will remain elevated as
high levels of demand among south coast markets
will run up against low levels of existing and new
home inventory, particularly in Metro Vancouver,
while the northern markets will stabilize later in the
forecast period. The median home value is forecast to
climb nearly five per cent in 2017 and three per cent
in 2018 to reach $508,000. Resale market strength
and low inventory will propel new housing starts
higher over the forecast period and by extension be a
key driver of economic growth.
Economy supports housing demand but
regional patterns diverge
Moderate expansion of B.C.’s economy will supportoverall housing market activity, but we expect unbal-
anced growth owing to more challenging economic
conditions in some regions. Economic growth will
edge down from 2015 but remain moderate at 2.8
per cent with employment growth of 1.5 per cent.
Strong household demand and residential investment
will remain the key growth drivers this year, with
further rotation of the economy towards exports of
goods and services due to a low Canadian dollar and
higher demand from the U.S.
BC Housing Forecast Update: 2016-2018
B.C. Housing Forecast2014 2015 2016 2017 2018
Residential Transactions, Units 76,259 93,712 109,475 109,010 107,025
16.4 22.9 16.8 -0.4 -1.8
Residential Median Transaction Price 402,000 430,000 473,000 495,000 508,000
5.2 7.0 10.0 4.7 2.6
Housing Starts 28,356 31,400 35,800 37,600 38,700
4.8 10.7 14.0 5.0 2.9
Source: Landcor, CMHC, Central 1 Credit Union 2015=actual
Resale Market Forecast, B.C.
0
100
200
300
400
500
600
0
20
40
60
80
100
120
1994 1998 2002 2006 2010 2014 2018
Transactions (L)
Median Price (R)
Units (000s) Dollars (000s)
Source: Landcor Data Corp, Central 1 Credit Union, 2016-18 Forecast
8/18/2019 Economic Analysis of British Columbia
2/14Economic Analysis of B.C. 2
Central 1 Credit Union
The current growth cycle is heavily weighted
towards Metro Vancouver and Vancouver Island
markets which benefit from the broad trends of
higher tourism, low borrowing costs, a competitive
exchange rate and strengthening interprovincial and
intra provincial migration. In contrast, interior and
northern B.C. markets are adjusting to the pain of a
prolonged and broad-based commodity price slump.
Low metal and mineral prices are curtailing mine
construction and exploration and leading to closures,
although forestry and tourism will provide a lift in
some markets. Benchmark natural gas prices are
depressed, down 35 per cent from a year ago, driving
an investment slump in the northeast, which further
adds to the uncertainty about the future of liquefied
natural gas. Canada’s oil price shock disproportion-
ately affects these labour markets, which are home to
relatively more (now laid off) interprovincial workers
who worked in the Alberta energy patch. Divergencein economic conditions is clearly evident in labour
market performance, which has shown steep employ-
ment losses and higher unemployment rates in the
central and northern interior, along with substantial
gains in employment insurance recipients.
We expect current trends to extend this year with
the south coast leading economic and employment
growth. Real GDP expansion of 2.9 per cent is
forecast in 2017 but it will be led more by export-
oriented growth and increased business invest-
ment. We expect the central and northern interioreconomies to show improvement during this period
with continued expansion in the forestry sector, and
higher metal and mineral prices. Our outlook includes
one LNG project by the end of the decade, which will
fuel increased construction investment in the north.
Household formation is anticipated to hold steady
with population growth. While population gains
were less than stellar in the fourth quarter at 0.9 per
cent year-over-year, and an annualized trend of one
per cent, underlying details point to some optimism
going forward. Weaker net migration figures in the
fourth quarter largely reflected a decline in netnon-permanent residents, while the flow of landed
immigrants held at an elevated pace following
exceptionally weak trends from mid-2014 to mid-
2015. Moreover, the province is generating higher
net interprovincial migration as the Alberta recession
and moderate B.C. economic growth drive more
in-migration to the province and fewer outflows. Net
interprovincial is trending at the highest level since
the mid-1990s.
Population growth is expected to edge higher over
the forecast period with one per cent growth thisyear, 1.1 per cent in 2017 and 1.2 per cent in 2018.
Near-term growth will be boosted by more Syrian
refugees, but we expect interprovincial migration
to accelerate and further rebounds in international
inflows going forward. Demographic factors will also
underpin interprovincial migration as retirements
lead to a westward flight of greybirds to B.C. Larger
urban centres with key amenities and Vancouver
Employment Growth by Region
Year-over-year % change
-8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0
Vancouver Island and Coast
Lower Mainland-Southwest
Thompson-Okanagan
Kootenay
Cariboo
North Coast and Nechako
Northeast
Source: S tatist ic s Canada, Central 1 Credit Union Latest: Mar/201 6
Labour Market PerformanceUnemployment Rate (pp) LFS Employment Growth (%) EI Beneficiaries
Mar./16 Mar./16 Jan./16
Development Region Actual y/y ch. y/y % ch. y/y % ch.
Vancouver Island and Coast 7.3 1.2 0.9 5.6
Lower Mainland-Southwest 6.4 0.2 5.3 -4.9
Thompson-Okanagan 9.4 1.7 -1.0 15.1
Kootenay 7.3 0.1 -1.3 9.2
Cariboo 6.7 1.2 -4.5 12.9
North Coast and Nechako 6.8 1 -5.9 15.5
Northeast 9.7 5.5 -4.6 60.5
Source: Statistics Canada, Central 1 Credit Union adjustments and calculations
8/18/2019 Economic Analysis of British Columbia
3/14Economic Analysis of B.C. 3
Central 1 Credit Union
priced properties and lack of supply in Metro Vancou-
ver will constrain sales, provincial resale transactions
are forecast to climb 17 per cent to about 109,500
units and median price growth of 10 per cent to
$473,000. Strong demand and momentum among
south coast markets will drive record home sales
this year, offsetting declining sales and prices in a
number of commodity-oriented regions which make
up a small share of provincial activity. Provincial sales
Island communities are expected to welcome most of
the newcomers.
Little change is anticipated for posted mortgage
rates through 2017. National economic growth isexpected to trend higher over the forecast period
but at a mild pace, holding the economy below
potential and inflation below target. The Bank of
Canada will stay on the sidelines until later in 2017,
anchoring variable rates at current levels, while a
subdued growth outlook will hold back long yields.
Administered rates will reflect bond market trends
with a lag. Posted one-year fixed term rates will hold
level at 3.15 per cent through next year, with the
five-year term edging up 15 basis points to 4.8 per
cent. Forecast average annual rates climb by quarter
of a point in 2018.
B.C. housing activity to remain robust
It has been a spectacular start to the year for provin-
cial B.C. housing indicators which have far outpaced
our expectations from late 2015. Year-over-year
sales growth over the first two months reached 40
per cent as unrelenting demand momentum on the
south coast has more than offset weakness in other
regions to drive provincial sales and prices higher.
The sales trend has climbed above mid-2000 levels,
while the median provincial home value trended near$460,000 – up 11 per cent from a year ago – partly a
reflection of increased sales in higher priced regions.
The strong handoff to 2016, positive demand
drivers, and lack of inventory have led us to substan-
tially revise our outlook higher through 2018. While
monthly sales momentum is expected to ease by
mid-year, as the pull-forward of sales due to changes
in minimum down payment requirements for higher
B.C. Residential Transactions
0
2,000
4,000
6,000
8,000
10,000
12,000
2007 2009 2011 2013 2015
MLS® Sales Resale Transactions (Landcor)
Units
Source: CREA, Landcor, Central 1 Credit Union Latest: Feb/2016
B.C. Median Residential Price
250,000
300,000
350,000
400,000
450,000
500,000
2007 2009 2011 2013 2015
Source: Landcor, Central 1 Credit Union Latest: Feb/2016
Dollars
Regional B.C. Unit Sales Forecast2016
-10
-5
0
5
10
1520
25
B.C. South Coast &
Island
Interior Northern B.C.
2016 2017
Source: Landcor, Central 1 Credit Union
Median Resale Price Growth ForecastAnnual
-10 -5 0 5 10 15
Vancouver Island/Coast
Lower Mainland/Southwest
Thompson/Okanagan
Kootenay
Cariboo
North Coast
Nechako
Northeast
Province
2016
2017
Source: CREA, Central 1 Credit Union
Per Cent
8/18/2019 Economic Analysis of British Columbia
4/14Economic Analysis of B.C. 4
Central 1 Credit Union
rates. Exceptionally strong early year sales trends
are unlikely to continue past the second quarter, as
the pull-forward impact of minimum down payment
requirements on higher priced homes dissipates
and bites marginally into sales activity. Foreign
ownership has come sharply into public focus but
the state remains blurry as ever. Existing estimates
suggest foreign buyers are responsible for about five
per cent of sales in recent years, but this has likely
will hold steady in 2017 near 109,000 units as a mild
decline in the Lower Mainland is offset by growth in
other regions, but price growth will remain a solid 4.7
per cent. The south coast market’s share of provincial
sales will peak in 2016 as momentum in the region
eases going forward and weakening trends among
commodity-oriented regions stabilize.
Construction investment lifted by housing
demand
Rising prices and lack of supply will trigger further
increases in new housing and renovation construc-
tion. Similarly to the broader market, this will be
concentrated in B.C. regions with stronger economic
prospects, while markets caught in the cyclical com-
modity downdraft will face a period of lower residen-
tial construction activity as existing home inventory
will swell and lack of population growth and migrantworkers will limit the need for new housing. Provincial
housing starts have surged in early 2016 and are
forecast to reach 35,800 units this year and increase
to 37,600 units in 2017 and nearly 39,000 in 2018.
Multi-family starts will be the dominant product
type, given the strength of housing demand in Metro
Vancouver.
A broad uplift in the housing market means residen-
tial investment spending will remain a key impetus for
provincial economic growth. We forecast residential
investment growth of ten per cent this year with a
moderate average gain of about five per cent in 2017
and 2.5 per cent in 2018.
Metro Vancouver drives provincial growth,
prices surging
We have run out of superlatives to describe persis-
tence of hot market conditions in the Greater Vancou-
ver area, but strong demand and an early year sales
surge are guaranteed to drive robust sales, while
rock-bottom inventory levels will keep prices on the
rise into 2017. Having far surpassed our expectationsin late 2015 we now expect sales growth of 22 per
cent this year and a median price gain of 13 per cent
to reach $668,000. Sales will ease in 2017 and 2018
on a combination of affordability erosion and lack of
available inventory, but will remain elevated.
Regional demand is being driven by both domestic
and external factors. Employment growth trends near
four per cent year-over-year, population growth is
moderate, while the march of millennials into hom-
eownership continues unabated amidst low interest
Residential Investment
0
5
10
15
2025
30
35
40
45
-10.0
-5.0
0.0
5.0
10.0
15.0
2005 2007 2009 2011 2013 2015 2017
Residential Investment $2007 (L)
Housing Starts (R )
Source: Statistics Canada, Central 1 Credit Union
Per Cent Units (000s)
Greater Vancouver Resale Activity
0
100
200
300
400
500
600
700
0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2002 2004 2006 2008 2010 2012 2014 2016
Sales (L) Median Price (R )
Source: Landcor, Central 1 Credit Union Latest: Feb/2016
Units Dollars (000s)
Housing Price Momentum
0.0
10.0
20.0
30.0
40.0
50.0
60.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
2005 2007 2009 2011 2013 2015
m/m price change* (L) Sales-to-Active Listings Ratio (R )
Source: CREA, Central 1 Credit Union Latest: March/2016
*3-month average, benchmark MLS® Lower Mainland price
Per Cent Per Cent
8/18/2019 Economic Analysis of British Columbia
5/14Economic Analysis of B.C. 5
Central 1 Credit Union
values, the housing option preferred by many, which
has reflected a regional land shortage. Multi-family
home prices have not kept pace, but will rise a still
strong nine per cent for attached units and 7.6 per
cent for apartments. Last year’s modest price growth
in the multi-family sector partly reflected a changing
sales mix of location and prices as the MLS® bench-
mark price indices show growth of closer to 15 per
cent.
Home sales and prices growth will decelerate but
remain high over the next two years. Resale transac-
tions are forecast to decline by 1.64 per cent in 2017
and three per cent in 2018, while median home
values will climb six per cent and three per cent.
While demand remains robust, a general lack of
listings and affordability erosion is anticipated to cut
into sales activity.
High prices will push more prospective buyers ofsingle-detached homes into the multi-family market,
while some entry-level buyers will be priced out
and others will be unwilling to adjust expectations.
Supply is forecast to remain tight, with only mild relief
as an increasing number of homeowners cash in on
high prices and downsize, or move to other regions.
The exemption of new homes priced up to $750,000
from the property transfer tax could drive some
increase in entry-level listings, but that will depend
on the state of new home inventory. Purchases of
pre-sale units will take years to materialize into an
increase in supply.
climbed, particularly in the high-end of the housing
market as the low Canadian dollar has boosted sales
to China and U.S. buyers. Better data should come
available given the provincial government’s plan to
track citizenship data of buyers. However, the federal
government announcement of $500,000 via Statis-
tics Canada to study the situation essentially amounts
to a token study of the issue. Our view is that the
impact of foreign ownership is unlikely to be more
than 10 per cent of the market and is concentrated
in the luxury market, but does have ripple effects
on the rest of the housing market as high-income
households move down market, lifting prices.
Robust demand is only one part of the story with a
severe supply shortage a substantial driver of price
appreciation. Rising prices are only starting to trigger
a material increase in new listings and growth has
quickly been absorbed by the market. A multi-year
period of flat multi-family prices has limited the ability
of entry-level purchasers to move up market, while
owners of single-family homes may be constrained by
limited options for mobility in their local area given
lack of new single-family development, and may
be holding on for further capital appreciation. This
severe imbalance in market demand and supply is
reflected in a rise in the sales-to-active listings ratio to
unprecedented levels – a clear precursor to bidding
wars and price momentum.
This year’s topline price gain will be underpinned by
a more than 20 per cent increase in detached home
GVRD 2014 2015 2016 2017 2018Resale Market Transactions All Units 38974 50873 62,000 61,000 59,000
% change -32.3 30.5 21.9 -1.6 -3.3
Detached 18318 24035 29,500 28,300 26,400
% change -29.0 31.2 22.7 -4.1 -6.7
Row/Duplex 6643 8638 10,200 10,700 10,800
% change -37.9 30.0 18.1 4.9 0.9
Condo Apartment 13645 17750 21,800 21,600 21,400
% change -33.8 30.1 22.8 -0.9 -0.9
Resale Median Price All Units 547,500 590,000 668,000 708,000 731,000
% change -24.0 7.8 13.2 6.0 3.2
Detached 805,000 920,000 1,130,000 1,220,000 1,270,000
% change -35.6 14.3 22.8 8.0 4.1
Row/Duplex 433,000 450,000 490,000 515,000 535,000
% change -16.7 3.9 8.9 5.1 3.9
Condo Apartment 367,500 383,000 412,000 425,000 440,000
% change -16.5 4.2 7.6 3.2 3.5
Source: Landcor, Central 1 Credit Union 2015=actual
8/18/2019 Economic Analysis of British Columbia
6/14Economic Analysis of B.C. 6
Central 1 Credit Union
economic conditions, it is likely that eroding afford-
ability and owners cashing out is radiating outwards
pushing households further into the Fraser Valley as
well as to the increasingly bedroom community of
Squamish. The cashing out phenomenon is furtherlifting activity in areas like Sechelt and Gibsons, which
are posting rising sales and price trends, alongside
anecdotal evidence of increased buying of existing
and new developments from the Lower Mainland buy-
ers, while recreational markets like Whistler receive
an exchange rate bounce.
Vancouver Island sees demand upshift,
prospects positive
Similarly, housing activity continues to strengthen
across Vancouver Island. While not to the same
degree as the Lower Mainland, sales and home prices
are on the rise. Positive employment momentum
of two per cent, which is largely being driven by a
strong uplift of about five per cent year-over-year in
the Victoria capital region, and strengthening popula-
tion growth are underpinning local demand. Popula-
tion has expanded by 0.9 per cent over the past two
years after four years of stagnation due to surging
interprovincial and intra provincial migration, primar-
ily to the Victoria and Nanaimo areas, with solid gains
across age cohorts.Favourable demand drivers have propelled an up
cycle in the Vancouver Island resale market since
early 2014 and sales are now approaching the robust
pace seen in the mid-2000s. Sales in Victoria have
already surpassed cycle highs observed during the
2000s and are forecast to rise 20 per cent this year.
The cycle is similar in the Nanaimo centred region
and in aggregate for the rest of the island, but below
prior peaks. Sales momentum has generally outpaced
Market adjustment requires a ramp up in new home
starts and construction in Metro Vancouver. While
this is already occurring, new project building times
are lengthy, and will not significantly slow price
growth in the short- to medium-term.
The record gap between detached and multi-family
homes is permanent and not an anomaly. While
rapid price gains for detached homes have induced
speculative activity with flipping at the highest level
since the mid-2000s and prices look a bit frothy, the
long-term trend should remain positive reflecting
scarcity of developable land and increased demand.
The trend to greater density will not be reversed
given the fixed regional land base. The romanticized
view of a single-family detached home for every fam-ily is antiquated and increasingly illusory. Detached
homes make up a shrinking share of the housing stock
and increasingly are no longer single-family dwellings.
According to data from Landcor, about 24 per cent
of detached homes in Greater Vancouver include at
least one legal suite (secondary) suite, up from 12 per
cent at the turn of the century. This under-represents
the market given unregistered shadow rentals. Hardly
the Vancouver Special this is becoming the norm.
Detached homes have become a luxury product and
income producing asset and are being priced as such,
and will continue to be detached not from reality butfrom incomes available only to the uber-wealthy, or
those already in the market.
Market conditions in Greater Vancouver dominate
Lower Mainland-Southwest trends, but there has
been broad strength in the Abbotsford-Mission and
Chilliwack-anchored Fraser Valley, the Squamish
Lillooet, and Sunshine Coast regions. These are partly
due to the strength in Greater Vancouver. While un-
derpinned by low mortgage rates and strengthening
Greater Vancouver Median Home Price
0
200
400
600
800
1,000
1,200
1,400
2005 2007 2009 2011 2013 2015 2017
Detached Apartment Attached
Source: LandcorData Corp, Central 1 Credit Union
Dollars (000s)Forecast
Fraser Valley Resale Transactions
0.0
50.0
100.0
150.0
200.0
250.0300.0
350.0
400.0
450.0
0
1,000
2,000
3,000
4,0005,000
6,000
7,000
8,000
2005 2007 2009 2011 2013 2015 2017
Sales (L) Median Price (R )
Source: LandcorData Corp, Central 1 Credit Union
Units (000s) $000s
8/18/2019 Economic Analysis of British Columbia
7/14Economic Analysis of B.C. 7
Central 1 Credit Union
market shocks, underpinned by steady population
gains and inflows of retirees. In contrast, sales trends
are weaker elsewhere in the region. The flow of
MLS® data for regional markets point to ongoing
excess inventory in the Kamloops region, but broadly
balanced in the Okanagan markets.
Resale housing market activity in the Thompson-
Okanagan is forecast to hold steady this year in light
listings activity and contributes to a sellers’ market in
Victoria and generally balanced conditions elsewhere.
Sale prices are following suit, particularly in single-
detached housing markets, although apartment
prices have declined, which reflects some new inven-
tory overhang. MLS® benchmark constant-quality
price indices for the regional real estate boards have
trended at a pace above five per cent in early 2016.
Median prices are forecast to climb four per cent in
the capital area with stronger detached home prices,
and five per cent in Nanaimo.
Upside sales and price pressure is forecast to continue
on Vancouver Island. Economic growth and popula-
tion growth will largely underpin demand for housing.
Growth in the retiree and semi-retiree demographic
remains a long-term force, while intra provincial
migration is expected to climb from the Lower
Mainland driven in part by higher prices there. Solid
government finances will likely boost public service
hiring following a lean few years. Vancouver Island
sales will climb by three per cent in 2017 before
steadying, while prices will climb by about three per
cent per year.
The strong housing market growth story largely stops
with B.C.’s south coast as the interior housing markets
must adjust to a number of headwinds, namely low
commodity prices that impede investment and migra-
tion to the region and the impact of the oil patch
recession, which will negatively impact regional
incomes both through the interprovincial worker andrecreational demand channels.
Interior B.C. markets face some headwinds
from broader economy
Weaker labour market and economic conditions and
subdued demand from Alberta buyers have likely
contributed to a weaker housing growth cycle in the
Thompson-Okanagan, while the Kootenay also faces
challenges from a weak coal sector.
Thompson-Okanagan sales momentum has stalledsince mid-2015, but remains moderate as lower
regional employment has offset positive news from
an improved tourism market, forestry sector and
manufacturing, with similar sales patterns across
the region. Sales in the Kelowna-anchored Central
Okanagan are comparably stronger and trend at a
level observed in the mid-2000s, reflecting a hefty
pace of population growth in recent years. Increased
economic diversity and deeper labour markets of
larger urban areas are more immune to external
MLS® Housing Price Index Growth
-10.0
-5.0
0.0
5.0
10.0
15.0
2010 2012 2014 2016
Victoria REB Vancouver Is land REB
Source: CREA, Central 1 Credit Union Latest: Feb/2016
Year-over-year per cent change
Resale Market Forecast, Vancouver Island
0
50
100
150
200
250
300
350
400
450
0
5
10
15
20
25
2002 2006 2010 2014 2018
Transactions (L) Median Price (R)
Units (000s) Dollars (000s)
Source: Landcor Data Corp, Central 1 Credit Union, 2016-18 Forecast
Central Okanagan Resale Forecast
200.0
250.0
300.0
350.0
400.0
450.0
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
2005 2007 2009 2011 2013 2015 2017
Sales (L) Median Price (R )
Source: LandcorData Corp, Central 1 Credit Union
Units (000s) $000s
8/18/2019 Economic Analysis of British Columbia
8/14Economic Analysis of B.C. 8
Central 1 Credit Union
pering investments in key mining and energy sectors,
although variation is anticipated among areas.
A sharp downturn in the regional economy is taking
a toll on the northeast B.C. housing market. Closures
of metallurgical mines near Tumbler Ridge due to
a slump in prices, weak natural gas prices and their
impact on the region and neighbouring Grande
Prairie, AB, have pushed unemployment to about nine
of mixed economic conditions. Resale transactions
are broadly unchanged, as a mild gain of about one
per cent sales growth in the Central Okanagan and
Thompson-Nicola regions will be offset by trims
elsewhere in the region. Home values will reflect
market conditions. Central Okanagan is forecast
to post median price growth of about 1.5 per cent
this year with no growth in the Thompson-Nicola.
In aggregate, Thompson-Okanagan sales will be flat
this year, before rising by 1.6 per cent in 2017 and
two per cent 2018. Median home values will follow
suit, rising to two per cent per year over the next two
years after a flat 2016 to reach $344,000 by the end
of the forecast period.
Economic fundamentals in the Kootenay area have
worsened due to the weak environment for coal and
conditions in Alberta, although improvements in tour-
ism and forestry have provided some offset. Home
sales in the region edged higher in 2015 following
a strong 2014 performance, but the growth cycle
has since moderated as mild uplifts in the Central
Kootenay and Kootenay Boundary areas have been
offset by weakness in the East Kootenay region. The
Eastern region, anchored by Cranbrook, Fernie, and
Kimberley, is most impacted by weak coal markets
and tempered Alberta demand. The rest of the
areas have seen steady sales activity with moderate
improvements in other sectors.
Despite some market divergence, the broad Kootenay
housing market continues to be oversupplied, whichis reflected in the MLS® sales-to-active listings ratio
which points to buyers’ market conditions. A lower
ratio compared to other regions is not abnormal,
given that it partly caters to external recreational
demand, but it is clear market conditions are soft.
Range-bound median home values have persisted
since 2007 and will likely persist. Low coal and oil
prices will continue to hamper a demand rebound. A
strong early-year sales uplift is expected to temper,
leading to four per cent sales growth, but we forecast
a reversal in 2017 and range-bound activity into
2018. The median home value is forecast to dip two
per cent this year, followed by a flat profile in 2017
and 2018.
Commodity price pressures take a toll on
northern housing markets
Northern B.C. markets will experience the brunt of
persistently weak commodity markets that are ham-
Thompson-Nicola Resale Forecast
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
0
500
1,000
1,500
2,000
2,5003,000
3,500
4,000
4,500
2005 2007 2009 2011 2013 2015 2017
Sales (L) Median Price (R )
Source: LandcorData Corp, Central 1 Credit Union
Units (000s) $000s
Central and Southern B.C. Interior
Sales-to-Active Listings Ratios
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2005 2007 2009 2011 2013 2015
OkanaganMainline
South Okanagan
Kamloops
Kootenay
Source: Local Real Estate Boards, Central 1 Credit Union Latest: Feb/2016
Per Cent
Kootenay Resale Forecast
0.0
50.0
100.0
150.0
200.0
250.0
300.0
0
1,000
2,000
3,000
4,000
5,000
6,000
2005 2007 2009 2011 2013 2015 2017
Sales (L) Median Price (R )
Source: LandcorData Corp, Central 1 Credit Union
Units (000s) $000s
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Annual Residential Resale Transactions, Development Regions2014 2015 2016 2017 2018
Vancouver Island/Coast 12,592 15,140 18,000 18,500 18,000
11.3 20.2 18.9 2.8 -2.7
Lower Mainland/Southwest 45,195 59,036 72,000 71,000 69,000
18.7 30.6 22.0 -1.4 -2.8
Thompson/Okanagan 10,883 12,169 12,200 12,400 12,700
20.1 11.8 0.3 1.6 2.4
Kootenay 2,710 2,778 2,900 2,800 2,890
15.1 2.5 4.4 -3.4 3.2
Cariboo 2,364 2,430 2,400 2,410 2,450
9.8 2.8 -1.2 0.4 1.7
North Coast 932 727 700 710 725
-9.5 -22.0 -3.7 1.4 2.1
Nechako 403 521 500 490 510
4.4 29.3 -4.0 -2.0 4.1
Northeast 1,180 911 775 700 7504.0 -22.8 -14.9 -9.7 7.1
Province 76,259 93,712 109,475 109,010 107,025
16.4 22.9 16.8 -0.4 -1.8
Annual Residential Resale Transactions, Select Regional Districts2014 2015 2016 2017 2018
Greater Vancouver 38,974 50,873 62,000 61,000 59,000
18.1 30.5 21.9 -1.6 -3.3
Capital 5,501 6,765 8,100 8,300 8,000
10.8 23.0 19.7 2.5 -3.6Central Okanagan 4,316 4,979 5,050 5,100 5,250
25.9 15.4 1.4 1.0 2.9
Fraser Fort-George 1,529 1,615 1,620 1,625 1,650
7.9 5.6 0.3 0.3 1.5
Fraser Valley 4,446 5,840 7,200 7,100 7,000
18.7 31.4 23.3 -1.4 -1.4
Nanaimo 3,018 3,665 4,000 4,200 4,100
11.9 21.4 9.1 5.0 -2.4
Thompson-Nicola 2,120 2,472 2,500 2,560 2,600
-0.4 16.6 1.1 2.4 1.6
Source: Landcor, Central 1 Credit Union 2015=actual
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Residential Permit Volume ($000s)2014 2015a 2016 2017 2018
Province 7,347,640 9,445,370 9,808,000 10,036,500 9,847,000
% change 7.0 28.5 3.8 2.3 -1.9
Vancouver Island & Coast 907,831 1,080,664 1,200,000 1,230,000 1,210,000
% change 25.7 19.0 11.0 2.5 -1.6
Lower Mainland/Southwest 5,125,339 7,043,333 7,300,000 7,500,000 7,300,000
% change -0.3 37.4 3.6 2.7 -2.7
Thompson/Okanagan 765,449 829,530 870,000 860,000 870,000
% change 31.8 8.4 4.9 -1.1 1.2
Kootenay 204,316 182,193 185,000 190,000 190,000
% change 23.2 -10.8 1.5 2.7 0.0
Cariboo 99,539 105,086 113,000 117,000 120,000
% change 17.9 5.6 7.5 3.5 2.6
North Coast 45,483 41,343 30,000 31,000 35,000
% change 126.9 -9.1 -27.4 3.3 12.9
Nechako 23,082 12,725 10,000 10,500 12,000% change 49.3 -44.9 -21.4 5.0 14.3
Northeast 176,601 150,496 100,000 98,000 110,000
% change 28.0 -14.8 -33.6 -2.0 12.2
Source: Statistics Canada, Central 1 Credit Union 2015=actual
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Variable/Date 2014 2015 2016 2017 2018Real Residential Investment (Millions) 19,864 21,609 23,767 24,831 25,445
% Change 7.6 8.8 10.0 4.5 2.5
Total New Dwellings 9,305 10,345 11,965 12,640 13,004
% Change 11.8 11.2 15.7 5.6 2.9
Renovations 8,033 8,573 8,982 9,270 9,491
% Change 8.2 6.7 4.8 3.2 2.4
Total Acquisition Costs 2,297 2,456 2,578 2,671 2,695
% Change -8.2 6.9 5 3.6 0.9
Other Residential Construction 228 235 242 249 256
% Change 5.4 2.9 3.2 2.7 2.7
Housing Starts (000s) 28.4 31.4 35.8 37.6 38.7
% Change 4.8 10.6 14.0 5.0 2.9
Detached 9.6 10.1 10.2 10.3 10.1
% Change 12.3 5.2 1.0 1.0 -1.9
Multi 18.8 21.3 25.6 27.3 28.6 % Change 1.4 13.3 20.2 6.6 4.8
MLS® Sales 84,049 102,517 118,900 119,300 119,000
% Change 15.2 22.0 16.0 0.3 -0.3
MLS® Average Price 568,405 636,627 748,000 778,000 798,000
% Change 5.8 12.0 17.5 4.0 2.6
Source: Statistics Canada, CMHC, CREA, Central 1 Credit Union 2015=actual
Terms
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Economic Analysis of British Columbia (the “Analysis”) may have forward-looking statements about the future economic growth of the Provinceof Ontario and its regions. These statements are subject to risk and uncertainty. Actual results may differ due to a variety of factors, includingregulatory or legislative developments, competition, technological change, global capital market activity and general economic conditions inCanada, North America or internationally. This list is not exhaustive of the factors that may affect any of the Analysis’ forward-looking statementsThese and other factors should be considered carefully and readers should not place undue reliance on the Analysis’ forward-looking
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Chief Economist: Helmut Pastrick Senior Financial Economist: David Hobden Senior Economist, BC: Bryan Yu Senior Economist, Ontario: Steve Stinson
Production: Judy Wozencroft