208 replies to this topic

[Mike K.]

It looks like economists are now circling a 0.25% cut compared to a larger cut that was discussed a week ago. That'll drop the rate to 2.75%.

 

It was 0.25% in early 2022, and through mid-2023 jumped to 5%.

 

Any predictions for March? I'll go with 687 sales.

[Ryan Cook]

Yes, that's what I am hearing too. I'm not as bullish as you. 615 is my prediction. 

[Mike K.]

We've got 615 - 687 

 

Anyone else?

[Barrister]

I wonder if people are nervous about where the economy might be heading? Does anyone know what sort of real impact a 25% tariff on lumber would do to us?

[Ryan Cook]

The Bank of Canada today reduced its overnight rate by 0.25%

"The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.

 

Canada’s economy grew by 2.6% in the fourth quarter of 2024 following upwardly revised growth of 2.2% in the third quarter. This growth path is stronger than was expected at the time of the January MPR. Past cuts to interest rates have boosted economic activity, particularly consumption and housing. However, economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments. The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed. 

Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.

Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.

 

Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation. Governing Council will be carefully assessing the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. The Council will also be closely monitoring inflation expectations. The Bank is committed to maintaining price stability for Canadians."

 

The next Bank of Canada Announcement is scheduled for April 16th

[Mike K.]

Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation. 

 

 

So higher prices, and higher interest rates?

[Ryan Cook]

[Mike K.]

133 sales over the last five business days.

[Ryan Cook]

[Mike K.]

145 sales over the past week.

Thanks, Ryan.

[Ryan Cook]

How B.C.’s New Earthquake Rules Leave Victoria Residents Vulnerable on Two Fronts

 

New rules came into effect within the BC Building Code this month aimed at protecting British Columbians from ‘the big one’ and implementing long-term adaptability so the population can age in place. But these new requirements will do just the opposite on southern Vancouver Island, where the same soft soils atop hard bedrock that increase potential earthquake impacts also make it impossible to build under the new seismic rules from the Ministry of Housing.

 

A 101-page report prepared for the Ministry of Housing and Municipal Affairs Building and Safety Standards Branch in Victoria spells out the issue in black-and white. Page 45 of the document tells us “Conventional shear walls are no longer adequate to handle the forces and require new solutions that are not normally used in structural design.”

In other words, we don’t know, from a technological standpoint, how to meet the new Building Code requirements while constructing wood-frame housing in southern Vancouver Island, including Victoria.

 

New Development off the Table

 

This takes a significant portion of new development off the table on the Island at a time when, as the BC Housing puts it in its commissioned report, a “demographic shift indicates a greater need for more accessible housing.”

From a values perspective, we agree on the intent of the 2024 BC Building Code updates; B.C.’s aging population and people with disabilities should be able to access housing and use it comfortably, and British Columbians should be able to feel safe from the possibility of a megathrust earthquake, expected off our coast within the next 50 years with a 10 to 15 per cent likelihood. But for Vancouver Island residents to benefit from the protections of the new building code, those homes need to be built first, and the exact set of rules designed to protect residents is preventing that from happening in the same sentence.

 

Built-in Barriers to Building Homes

 

The built-in barriers to developing new homes are not restricted to wood-frame homes either. New seismic requirements add an overall cost premium of about 11 to 15 per cent for a 15- to 20-storey concrete building in Victoria. For a new mid-rise wood-frame housing complex in Victoria, seismic requirements now add a cost of over 20 per cent.

 

The Urban Development Institute has been advocating for months about the prohibitively rising costs of development in the province. Developers are already facing the reality that it costs more to build right now than people can afford to live in. Rising development fees now make up close to one third of the cost to build in B.C., driving up project costs overall. In turn, projects are stalling at uncharacteristically high rates, and residential building permits are in decline.

The B.C. government’s new report on the impacts of the new BC Building Code tells us what we’ve been warning since last year when we asked for more time to consider solutions ahead of the problem: the new seismic requirements are the nail in the coffin for Victoria’s housing crisis, and they won’t protect anyone as long as we can’t build new homes under the new rules.

 

A Question That Requires an Answer

 

Over the past several months, little has been done on the part of the provincial government to understand the problem, nor to address it. The pause in implementation granted by the B.C. government in 2024 was a wasted opportunity with little action from the province, and we are left with little more than a shoulder shrug in the form of a 101-page report stating the impacts.

What are the “new solutions that are not normally used in structural design” needed to meet the new BC Building Code rules?

This question requires an answer, and the province must join us back at the table in finding out what that is, or what other mitigating measures can be taken to ensure Vancouver Island residents have safe, accessible housing—not just in theory, but in brick-and-mortar homes—or in this case, wood-frame and concrete housing.

 

Article

https://www.linkedin...uPk/rhYmj7Tw== 

Edited by Ryan Cook, 25 March 2025 - 01:25 PM.

[lanforod]

Either new builds just get more expensive or they don’t get built? Government needs to give this a proper risk treatment, as the way this article reads, the requirements are too hard and impractical meaning everyone will just stay with old builds and risk continues to grow. If the only option is to relax those requirements, so be it.

[Mike K.]

Perhaps the goal is for private industry to no longer be responsible for housing development. It already cannot compete with government projects.

Consider the five fronts government development projects currently benefit from:
- no serious concerns regarding approvals (ie a low barrier housing facility can pop up just about anywhere; as can a 20-storey tower)
- lower financing costs
- potential for already owned land used or re-used
- financial backing from other governments
- no need to prove financial viability to lenders, just pay the debt off

[Barrister]

Should be interesting how this is going to be paid off as the economy goes down the drain.

[Mike K.]

Through taxes.

City of Victoria taxpayers bought just about $20 million in real-estate last year, I think? Something like that.

Someone called me yesterday to discuss property taxation in Sooke, which is moving forward in 2025 with a 15.3% tax increase. It will have risen 36% over three years. This person tells me their accountant had warned them years ago to sell their Victoria property and move out of the municipality, before taxes became unaffordable for them. Their former property now pays $10,000 per year in property tax. The reason for their call was to discuss the impact of rapidly rising property taxes, and what that means for affordability.

Municipalities are out of control.

[Ryan Cook]

[Mike K.]

Wow, 159 sales over the past week.

 

Ryan, it looks like you'll have just about nailed the activity forecast for the month. I was much higher into the 600s. Looks like 620-ish will be the total for March?

[Ryan Cook]

Yeah I think we'll end up in 615-625 range.

[Barrister]

It was an okay month, a bit better than expected. We are all concerned with Trump distruction.

[Mike K.]

I’m sure the US situation has given some people pause, but the Victoria market is well insulated to ebbs and flows seen elsewhere in the country. We are also the first market that moves in spring, thanks to our weather.

5-year rates have dropped below 4% for the first time in a couple of years. The market is going to roar once the froth settles.