Real Estate Information and Market Trends| Real Estate Victoria BC

The Victoria Real Estate market certainly has a large impact on the economy here on Vancouver Island and the Real Estate market in all of Canada is doing the same. A recent article in the Times Colonist written by Eric Beauchesne of CanWest News Service reads:

The high-flying loonie will act as a drag on economic growth this year but will at least save Canadians from further interest rate increases, the Conference Board of Canada said yesterday as it lowered its forecast for Canadian economic growth this year.

The forecast, however, was released as the loonie was losing altitude and as the latest economic indicators — another record-shattering month of home sales and a surge in non-residential investment to yet another all-time high — underscored the resiliency of the domestic side of the Canadian economy.

The Canadian dollar fell below 95 cents US, continuing a slide that followed the Bank of Canada announcement this week that, while it was raising interest rates a quarter point, only a modest further increase will likely be needed to rein in inflation.

The Canadian Real Estate Association reported that the seasonally adjusted number of home sales rose 0.3 per cent last month to a new record high of 31,000, 10.9 per cent above a year earlier. Average home prices rose to an all-time high of $335,180 in June, up 10.4 per cent from a year earlier.

The continuing increase in home sales and prices comes despite four separate increases in mortgage rates in the May-to-June period, increases which continued this month, noted J.P. Morgan economist Ted Carmichael.

Meanwhile, Statistics Canada reported that heavy spending on office buildings in Alberta and Ontario pushed investment in non-residential building construction to another record high of almost $10 billion in the spring quarter of the year, extending the four-year upward trend in such spending. The increase, moreover, was widespread, including commercial, institutional and industrial buildings.

While the conference board remains upbeat about the outlook for the domestic side of the Canadian economy, it noted the unexpected 11 per cent surge in the Canadian dollar in the spring has put additional strain on manufacturers and exporters.

The economy surged ahead at an annual 3.7-per-cent pace in the first quarter of the year. Even so, the economic research organization forecast said the rising loonie has led it to downgrade its growth forecast to 2.5 per cent for this year from the 2.8 per cent it forecast three months ago.

“In addition to the strong dollar, the fact that U.S. growth will be modest will limit Canada’s export growth potential in 2007,” the board said, noting, however, that Canadian manufacturers are expected to respond to the strong dollar by investing heavily in productivity-enhancing machinery.

Following this week’s quarter-point interest rate hike, the strength of the currency should restrain the Bank of Canada from raising short-term interest rates further, the board said.

Also, despite the weaker economic growth, after-inflation disposable income will still rise by a healthy 3.6 per cent, reflecting continued wage and job growth. Manufacturing jobs, however, will continue to disappear, the conference board said.

It added that the federal and provincial governments are also all expected to chalk up budget surpluses, with the exception of Quebec, which, despite tax cuts, is aiming for a balanced budget. End of article.

We at Properties In Victoria Professionals predict that we will have at least ten years of strong economy and an active Real Estate market. What do you think? We would love to hear your comments.

Cheers, Anders

Properties In Victoria Professionals- Royal LePage Coast Capital Realty