By 2020, we can expect B.C.’s housing activity to pick up again
B.C.’S GDP growth rate is forecast to slow from 2.4 per cent in 2018, to 1.7 per cent in 2019, and 2.0 per cent in 2020 based on numbers by TD Economics.
According to the BC Check-Up, an annual economic report released by the Chartered Professional Accountants of British Columbia (CPABC), B.C.’s economic growth moderated throughout 2018 and into 2019, while the housing market cooled and the labour market neared capacity.
While moderated, B.C.’s growth rate still led Canada in 2018 and drove job creation. In 2018, the province added an average of 26,800 jobs, and in the first nine months of 2019, it added approximately 17,700 jobs. This was led entirely by gains in the service sector, which added 47,000 jobs. In contrast, the goods sector contracted by 29,400 jobs, due to job losses in the construction, forestry, and manufacturing industries.
“The goods sector, which is a mainstay of B.C.’s economy, was affected by ongoing trade tensions and increasing global economic concerns. The value of our overall exports are down when we look at year-to-date, largely due to declines in our primary exports ¬– wood, paper, and mineral products,” said Lori Mathison, President and CEO of CPABC.
Another reason for moderated economic growth in at least the first half of 2019 is the easing of housing activity in B.C. Real estate related activity accounted for approximately 18 per cent of B.C.’s GDP in 2018. This was followed by construction activity, which accounted for approximately 8.5 per cent of B.C.’s GDP. As a result, any decline in housing activity could affect the overall economic growth.
“After a period of market slowdown due to the introduction of stricter mortgage lending rules and tax changes, B.C.’s housing market seems to have adjusted, as we see overall lower prices but increases in month-to-month home sales. By 2020, we can expect B.C.’s housing activity to pick up again,” said Mathison.