Posted by: Daryl & Wendy Ashby | December 24, 2009

The Victoria Economy

The Victoria Economy will Recover

While the Victoria and British Columbia economies were negatively impacted by the global economic downturn that has hampered many economies around the world, there are signs that the worst may be over.

The key to the stabilization of the local housing market is continued  improvements in economic conditions.

Labour market: A robust labour market will support demand for homeownership. Victoria had one of the strongest labour markets in 2008, but like most regions of the country, it too has seen employment dip and the unemployment rate rise. Since bottoming out in May of 2009, the number of people employed within the Capital region has crept up and this trend will continue in 2010.

Post-secondary education: Continued investment in local post-secondary institutions will attract new students to the region and aid in the recovery of the local economy. Relative to last school year, active enrollments at Camosun College and the University of Victoria this fall were up 11 per cent and six per cent, respectively. A campus renewal project and sports field  upgrades are planned for the University of Victoria, while across town at Royal Roads, construction of a new academic building is scheduled to wrap up in late 2010.

Major projects and non-residential investment: While residential construction has been weak, the local economy has received a boost from a number of large-scale non-residential projects that are either currently under construction or in the planning stages. These include the Capital region wastewater management project, the Johnson Street bridge replacement, the Vancouver Island technology park expansion, and the Hillside Shopping Centre expansion.  These major projects will stimulate the local economy and housing demand.

According to the Major Projects Inventory, there were $11.7 billion in major projects (value exceeding $15 million) on the books as of June 2009.3 This estimate includes both non-residential and residential projects, and represents a 23 per cent increase from the value recorded in December 2008.

Proposed major residential developments include: Colwood Corners, the Roundhouse mixed-use community, South Skirt Mountain Village, and Mariners Village condominium development.

The Bank of Canada cut the Target for the Overnight Rate in the early months of 2009. The rate was 1.50 per cent at the start of 2009 and has since fallen to 0.25 per cent.

The Bank has committed to keeping this rate at 0.25 per cent through the middle of 2010 unless inflationary pressures warrant an increase.

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