60 / 369
Economic Overview
2016-2020 FINANCIAL PLAN
BRITISH COLUMBIA
British Columbia’s GDP is expected to come in at 2.7% during 2016 with unemployment
forecasted at 6%. US economic growth along with a weak Loonie should benefit the
export, manufacturing, tourism, film, and television sectors.
The housing market is expected to have another strong year with prices estimated to
appreciate 6.5% due to tight supply. Home sales have reached a pace that would absorb
the stock of units on the market in less than 4 months, a pace not seen since mid-2007.
The Bank of Canada continues to warn of real estate overvaluation in the Lower
Mainland and has voiced concern over homeowners’ ability to service debt when
interest rates begin to “normalize”.
The wealth effect in BC can be seen by examining the spending habits of consumers. As
real estate valuations climb, consumers spend in correlation to their perceived wealth as
evidenced by 3% more spending in 2015 in comparison to 2014, the highest rate of any
province. Surveys reveal that BC’s household confidence is currently at a post-recession
high.
The cost of living continues to
rise for British Columbians as
food and electricity costs, MSP
premiums and auto insurance
rates are expected to increase in
2016. BC Assessment’s latest
annual real estate assessments
reveal increases of 15% to 25%
for detached properties in the
City of Vancouver with similar
increases in surrounding
suburbs. In dollar terms, this
equates to an increase of
$200,000 to $400,000 for
detached houses within
Vancouver. These higher
valuations will likely drive up
property tax bills for many
property owners.
Full-time employment grew 2.4% last year. The strength of the BC labour market and
the sharp decline of Alberta’s oil and gas industries resulted in more than 24,000 people
who call BC home migrating back to the province. This is the highest in-migration rate
from Alberta in the 33 years that the statistics have been recorded.
+0.0%
+0.5%
+1.0%
+1.5%
+2.0%
+2.5%
+3.0%
+3.5%
2012
Actual
2013
Actual
2014
Actual
2015
Forecast
2016
Forecast
Gross Domestic Product 2012 ‐ 2016
Canada
USA
BC
53