CLI Points to Flattening Commercial Activity in 2019

Vancouver, BC – February, 2019. The BCREA Commercial Leading Indicator (CLI) declined by 1.8 points to 134.5 from the third to the fourth quarter of 2018. Compared to this time one year ago, the index is about 1 per cent lower.

“Following several years of robust growth, the BC economy slowed in 2018 and the CLI is reflecting that slowdown,” says BCREA Deputy Chief Economist Brendon Ogmundson. “That means the economic environment for commercial real estate activity will be less favourable in 2019.”

Slowing provincial economic activity continued in the fourth quarter, led by weak retail sales and a fourth quarter drop in manufacturing shipments in the forestry sector. Adding to those declines were falling manufacturing employment and a jump in short-term credit risk spreads. As a result, each component of the CLI posted a decline in the fourth quarter. Recent volatility in the CLI has left the underlying trend in the CLI flat over the past two quarters, signaling a slower growth environment for commercial real estate activity.

Canadian Inflation – February, 2019

Canadian inflation, as measured by the Consumer Price Index (CPI), registered only 1.4 per cent in the twelve months to January. That was a significant drop from 2 per cent in December due to a 7 per cent decline in energy costs.  Excluding the impact of falling gasoline prices, consumer prices were up 2.1 per cent. The Bank of Canada’s three measures of trend inflation were unchanged for a third straight month, averaging 1.9 per cent.   In BC, provincial consumer price inflation was 2.4 per cent in the 12 months to January.

Given stable inflation and what looks to be weak first quarter economic growth in Canada, the Bank of Canada is unlikely to change course any time soon.  Those expectations are being reflected in the steep drop in 5-year government bond yields, but not yet in mortgage rates offered by most lenders, which have only come down modestly.  A further fall in 5-year mortgage rates may be on the horizon as lenders compete for market share in the upcoming spring market, which would provide some degree of relief from the overly stringent stress test.

For more information, please contact:  Gino Pezzani.

Housing Market Adjusts to Mortgage Stress Test

BCREA 2019 First Quarter Housing Forecast Update

Vancouver, BC – February, 2019. The British Columbia Real Estate Association (BCREA) released its 2019 First Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to increase 2 per cent to 80,000 units this year, after recording 78,345 residential sales in 2018. MLS® residential sales are forecast to increase a further 6.9 per cent to 85,500 units in 2020. The 10-year average for MLS® residential sales in the province is 85,800 units.

“The negative shock to affordability and purchasing power created by the B20 stress test on mortgage borrowers is expected to continue constraining housing demand in the province this year,” said Cameron Muir, BCREA Chief Economist. “Favourable demographics along with continuing strong performance of the BC economy is expected to underpin housing demand over the next two years.”

The policy-induced demand shock has contributed to an increase of the inventory of homes for sale in most regions of the province. As a result, market conditions are expected to provide little upward pressure on home prices this year, with the average annual residential price forecast to remain essentially unchanged, albeit up 0.5 per cent to $716,100. Modest improvement in consumer demand is expected to unfold over the next two years as households further adjust to the mortgage stress test.

To view the full BCREA Housing Forecast, click here.

For more information, please contact: Gino Pezzani.

Canadian Retail Sales – February, 2019

Canadian retail sales declined 0.1 per cent on a monthly basis in December as lower sales at gas stations offset otherwise strong spending. Excluding sales at gas stations, retail sales were up 0.4 per cent. For all of 2018, Canadian retail sales rose 2.7 per cent.

In BC, retail sales fell 0.2 per cent on a monthly basis and were up just 0.6 per cent year-over-year. For all of 2018, BC retail sales rose just 2.1 per cent, a steep decline from the over 9 per cent growth in retail spending in 2017. A pick-up in job growth and pressure on wages from BC’s low unemployment rate should translate to a recovery in retail spending in 2019.

For more information, please contact: Gino Pezzani.

A Reminder to Make Your Speculation and Vacancy Tax Declaration

The speculation and vacancy tax is a key measure in tackling the housing crisis in major urban centres in British Columbia, where home prices and rents have skyrocketed out of reach for many British Columbians.

The provincial government is taking action because people who live and work in B.C. deserve an affordable place to call home.

The speculation and vacancy tax is a part of government’s 30-Point Plan to make housing more affordable for people in our province.

This new annual tax is designed to:

  • Target foreign and domestic speculators who own residences in B.C. but don’t pay taxes here
  • Turn empty homes into good housing for people
  • Raise revenue that will directly support affordable housing

All owners of residential property in the designated taxable regions of B.C. must complete an annual declaration. Over 99% of British Columbians are estimated to be exempt from the tax.

How to Exempt Yourself

To claim your exemption, you must register your property by March 31, 2019 – and it’s easy to do, either by phone or online. The information you’ll need to register your property declaration will be mailed by mid-February to all owners of residential property within the taxable regions. 

Contact us if you’re expecting a declaration letter from us and haven’t received one by late February.

Please note that if your property has more than one owner, even if the other owner is your spouse, a separate declaration must be made for each owner.

How the Tax Will Be Charged If You’re Not Exempt

The speculation and vacancy tax rate varies depending on the owner’s tax residency and whether the owner is a Canadian citizen or permanent resident of Canada, or a member of a satellite family.By levying the highest tax rate on foreign owners and satellite families (those who earn a majority of income outside the province and pay little to no income tax in B.C.), the speculation and vacancy tax is a way to make sure these property owners are paying their fair share in taxes.

The speculation and vacancy tax applies based on ownership as of December 31 each year.

Note: The speculation and vacancy tax is distinct from the empty homes tax in the City of Vancouver.

Read our answers to questions on the speculation and vacancy tax and learn about how to declare, the taxable regions and the available exemptions.

Subscribe to receive updates as new information about the speculation and vacancy tax becomes available.

Declaration Now Open

You can complete your declaration as soon as you receive your declaration letter. You need the Letter ID and Declaration Code from your letter before you start. We keep your information private and secure.

Declare Now

Contact Information

Contact us with your questions about the speculation and vacancy tax.

Agents are available to take your call from 8:00am to 8:00pm, 7 days a week.

Toll Free: 1 (833) 554-2323

(Outside North America) Office: 1 (604) 660-2421

Or Contact Gino Pezzani if you need any help.

Here is the original link from the governmental website: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax