Ashley Ford
Province
There will be no shutters going up on B.C.’s phenomenal housing run, Credit Union Central predicts. The organization’s economic analysis says in its latest edition released yesterday that “this cycle expansion is the longest on record.”
The housing sector appears to be in little danger, it suggests.
“There is little possibility of economy-wide cost-push inflation due to high energy prices or tight labour markets, which makes the interest-rate outlook relatively favourable.
“However, a major global economic slowdown or negative shock would reduce housing sales sharply, causing a substantial price correction,” the report warns.
Such things as a global economic slowdown, including a geopolitical event sparking an oil-price spike or conflict, a U.S. housing collapse or a run on the U.S. dollar are possible triggers for a market remake, it says.
“The first is impossible to forecast, while the latter two are unlikely,” the report concludes.
The union forecasts:
– Housing sales will continue to climb next year.
– The B.C. economy will post four-per-cent annual growth.
– House prices will climb, but the rate of increase will slow.
– Multi-unit starts will drive the home-building sector.
– The rental market will tighten.
– Interest rates will likely stay where they are now.
– Net inward migration will remain positive.
Of housing speculation, it says that while it remains relatively low, “one market exhibiting more speculative activity is in apartment condominiums in downtown Vancouver.”
© The Vancouver Province 2006