Job losses in January far exceeded the predictions, with Canada’s economy shedding 213,000 jobs. Most of the jobs lost, however, were part time positions in sectors hardest hit by pandemic-related restrictions, indicating that they may be relatively quick to return when restrictions are lifted. Despite job losses, Canada’s real estate market remains hot, with industry insiders predicting that the current upward trajectory of sales and prices will continue into 2021. Yet, with increasing housing prices comes challenges to affordability, as saving for a down payment has never been harder while housing in some regions in BC has now been priced out of the reach of the local residents.
As the COVID-19 situation rapidly evolves, we wanted to update our clients, partners, colleagues, and the public on our response to the pandemic.
The Business Council of British Columbia has downgraded its 2020 forecast for BC amid economic turbulence and COVID-19 fears. The initial forecast had predicted economic growth of about two per cent for the year, but with the rapid spread of COVID-19 the Council is now forecasting growth of around 1.4% - 1.5% under an optimistic scenario, and growth of under one per cent or even the possibility of a recession should the spread of the virus accelerate. The brunt of the economic impact will likely be felt in air transportation, tourism and hospitality however BC will likely also feel a hit relating cancelled conferences and public events
The BC Real Estate Association predicts strong growth in the real estate market, both in terms of sale prices and numbers of sales. However, numerous stakeholders are warning that the government will need to implement more supply-side policies, rather than continuing the concentration on demand-side policies like the mortgage stress test, in order to create a more balanced market capable of meeting the increased housing demand of a quickly growing population. Finally, there is some concern that the recent dramatic increase in insurance premiums could lead to the collapse of BC’s condominium market as hundreds of condo complexes in the Lower Mainland risk losing their strata insurance, rendering lenders unwilling to advance mortgages in the affected properties.
The Canadian job market reversed some of its losses from November, gaining 35,200 jobs in December. Overall, the Canadian economy added 320,000 jobs in 2019, including 282,800 full time jobs and 37,500 part time jobs. Experts say this confirms the Bank of Canada’s current policy stance that the economy remains resilient making further interest rate cuts unnecessary, and they predict the Bank of Canada will hold its interest rate steady at 1.75%. Assessment BC has released its 2020 property assessments, with many houses across Metro Vancouver seeing double-digit drops in value.
Fort St. John is experiencing a rise in commercial and residential real estate values after approval of the TransCanada Coastal GasLink pipeline. While prices in the Vancouver area continue to decline, sales have risen, and the Real Estate Board of Greater Vancouver believes this is a sign of a normalizing market. While some developers have had to cancel or delay real estate development in Metro Vancouver, others are experiencing some success by shifting their focus to purpose-build rental housing. Although observers have warned that the recent downturn in B.C.’s real estate market could result in catastrophic wealth destruction, the B.C. government believes the market is returning to normal conditions.
The Alberta Court of Appeal has determined in Canada v. Canada North Group Inc. that the Court has authority to prime the Crown’s deemed trust claim when creating restructuring charges.
Real estate prices in Greater Vancouver and the Fraser Valley continued to decline in June, as has the sales rate for presale condos in those regions. However, areas of Northern BC and Vancouver Island are experiencing gains in resale prices and strong sales. There are some indications that the declining markets may see a [...]
Important BC Supreme Court decision about a creditor’s duty to its borrower when enforcing security. In summary – the Court decided creditors are not obligated to track or predict market variations to maximize value when enforcing.
A new poll has found that most B.C. residents believe new taxation is making housing affordability worse. Residential real estate in the Lower Mainland has suffered nearly $90 billion in losses to home equity in the past year which will have major impacts on the B.C. economy. Home sales across the province will remain [...]