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TRICITYNEWS.COM THURSDAY, AUGUST 22, 2019
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CENTRAL 1 CREDIT UNION FORCAST:
Housing market will drag on strong B.C. economy A slowdown in residential construction investment will be a drag on the B.C. economy over the next year or two, but this will be offset by a boom in non-residential building, according to a forecast released August 16 by Central 1 Credit Union. Housing starts in the province are currently high, supported by presales in the active markets of the past few years. But this will slow down along with current new home sales, wrote Central 1’s chief economist Bryan Yu. Yu wrote, “Starts are forecast to dry up. New housing is a lagging indicator of the market and a downshift is anticipated with the cooling of demand. Timing is uncertain particularly given the longer lead time for large, complex multi-family projects. A pull back in momentum in the second half of this year contributes to a four per cent annual decline in starts in 2019, with a decline of 15 per cent in 2020. Residential investment will be an increasing drag on the economy [although] rental construction may pick up some of the slack.” He said that he expects residential investment spending to decline three per cent in 2020 “after eking out a small increase in 2019” and then it will stay flat through 2021. CAPITAL PROJECTS BOOMING However, Yu expressed confidence that non-residential construction growth, especially in major projects, will offset some of these losses to the B.C. economy.
“Rising non-residential construction is … indicative of firm growth. Building permits rose more than 60 per cent through May, with strong gains across private and public sector intentions. Government investments in schools and hospitals have lifted activity, alongside major private sector initiatives including new office space in Vancouver. Adding to this is ongoing engineering work on major projects such as the Site C dam in the Peace region and the liquefied Government investments in natural gas activity in the schools and hospitals have northwest.”
lifted activity, alongside major private sector initiatives including new office space in Vancouver.
Looking further ahead, Yu wrote that major capital projects will be key drivers of B.C. economic activity.
He wrote, “Major capital projects will be key drivers of growth over the coming years. Build out of the LNG Canada liquefied natural gas facility in Kitimat and associated pipelines through to 2023, coupled with ongoing construction of the Site C dam and twinning of the Trans Mountain pipeline will highlight the rising investment cycle. Public works projects including the Patullo Bridge replacement, extension of the subway line in the Vancouver Broadway corridor will CENTRAL 1 ECONOMIST BRYAN YU
Burnaby / Tri-Cities HOME SALES* Attached Detached
71 30
MEDIAN SALE PRICE** Attached Detached
$583,000 $1,285,000
TOP SALE PRICE*** Attached Detached
$1,370,000 $3,100,000
ACTIVE LISTINGS† Attached Detached
1,974 1,206
DAYS ON MARKET†† Attached Detached
49 71
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* Total units registered sold July 29-August 4 as of August 20 ** Median sale price of units registered sold July 29-August 4 *** Highest price of all units registered sold July 29-August 4 † Listings as of August 20 †† Median days of active listings as of August 20 All sold and listings information as of August 20
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