BC Budget to be Tabled Today

British Columbia's finance minister is promising to stay the course in her next budget to be tabled today in the legislature.

Since coming to power more than two years ago, the NDP has made controlling costs for families, with a focus on housing, a hallmark of its economic policies. In its first two and a half years, the NDP government has eliminated Medical Service Plan premiums, increased social assistance payments, eliminated interest on student loans and raised support payments for children of foster parents. They have also brought in a new benefit that goes into effect in October to help families with children up to 18 years old. The benefit provides up to $1,600 annually for families with one child, $2,600 for two children and $3,400 for three children.

Overall, B.C.'s economy has remained strong, with the province consistently leading the country in economic growth.

Reference: https://www.timescolonist.com/b-c-budget-on-tuesday-expected-to-stay-the-course-as-economic-growth-moderates-1.24077932

Household Debt Rising Again

The Bank of Canada (BoC) data reveals household credit is on the rise and household debt reached a new all-time high in December 2019. However, the rise in growth is due almost entirely to mortgages. The outstanding balance reached $2.27 trillion in December, up 0.62% from a month before and a 4.2% increase compared to the same month last year.

Mortgage credit outstanding represented $1.63 trillion of the total outstanding debt in December 2019. Other types of credit are less attractive to households right now. Other reported consumer debt represents $641 billion of December’s outstanding amount, up only 0.31% from a month before.
Some feel the rise in mortgage debt is a result of Canadians experiencing FOMO (fear of missing out). Are they accessing their equity to have cash on hand in case there is an economic downturn? What are your thoughts?

TD Bank has lowered its five-year posted fixed mortgage rate from 5.34% to 4.99%.

"Based on current market conditions, lower funding costs have led to a growing variance in customer rates versus posted rates," said a bank spokesperson to BNN Bloomberg.

This came amid concerns surrounding coronavirus, which resulted in many investors buying more government-backed bonds. This has lowered the five-year government bond yield from 1.6% to 1.34%.

If the other big banks follow suit, this could compel the Bank of Canada to lower the benchmark rate to below 5% for the first time since the stress test rules were adopted.

This move spells good news for homebuyers and refinancers who are struggling to qualify at the current benchmark rate of 5.19%.

Lowering the stress test rate by 20 basis points could translate to a 2% boost in Canadians' borrowing power which would also mean that it would take 1.8% less income to qualify for a mortgage on the average Canadian home price, assuming a 20% down payment.

Doesn't sound like much, but it could encourage more people to enter the real estate market and lead to a busier spring.

Greater Victoria Neighbourhoods: Fisherman’s Wharf

Sometimes you need to turn a corner to see something splendid, and that’s so true of Fisherman’s Wharf; a marine destination just around the corner from Victoria’s Inner Harbour.

When you do, you will find a colourful collage of float homes, pleasure boats with live-aboard residents, working fishing vessels and commercial businesses featuring unique shops and food kiosks to serve your appetite for fresh fish and seafood.

At the east end, 33 berths are designated for float homes – floating residences that are not intended for use as a navigable craft. Owners share their neighborhood with harbour seals, herons, eagles, geese, cormorants, gulls, otters, and raccoons. The Greater Victoria Harbour Authority provides these homes with 30-amp power, potable water and sewage hookup to prevent discharge and to preserve the marine environment. The homes are all occupied and do not allow rentals.

Breaking News: Coronavirus Impacts on our Economy

Breaking News: Coronavirus Impacts on our Economy

The outbreak and widespread quarantine efforts are having ripple effects around the world according to Minister of Finance Bill Morneau. He said it will have a "significant impact" on Canada's economy during his speech this morning, at an Economic Club breakfast in Calgary AB.
Lockdowns in Wuhan and other hubs in the Hubei province due to the coronavirus outbreak have led to reduced demand for many industrial inputs. One of the results is a drop in oil prices by 15% during the crisis, Morneau said.

More than 40,000 cases of the novel coronavirus have been reported around the world, along with more than 900 related deaths, most of them in China. Seven cases have been reported in Canada; four in British Columbia and three in Ontario.

Greater Victoria Home Values Rising

The Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core in January 2020 was $858,500; an increase of 1.4 % from the January 2019 MLS® HPI benchmark value of $846,900, and 0.4% over the December value of $855,000.

The MLS® HPI benchmark value for a condominium in the Victoria Core in January 2020 was $521,100; an increase of 4.1% over the January 2019 MLS® HPI benchmark value of $500,500 and slightly more than the December value of $520,700.

BCREA (BC Real Estate Association) Predicts Price Growth in Greater Victoria

Prices are on the rise again. Increased demand will keep pushing home prices higher in major markets like Montreal, Toronto, Vancouver and Victoria through 2020. The flat prices and mild decline we witnessed in the first half of 2019 was a blip in the steadily climb in prices over the decades. Investors looking for value will set their sights on less densely populated cities like Victoria.

BCREA is predicting residential housing price growth in most areas of the province will be modest at less than 3%. However, Vancouver Island, the Fraser Valley, and BC Northern show potential for greater increases. Victoria is expected to see an improvement of more than 5%.