Cameron Muir provided an update on the state of the British Columbia economy. He noted that the province's forest sector is in troubled times as a result of the downturn in the U.S. housing market. As well, recession in the U.S. will impact the province’s tourism industry. Although both sectors more directly affect areas outside Vancouver and Victoria, their impact on the provincial economy as a whole will affect retail, industrial and office sectors in urban areas.

There are many very positive indicators. Employment growth, while slowing from earlier in the decade, will still be at or near the highest level in Canada. Unemployment remains very low, domestic consumption is strong and consumer confidence remains high. In-migration levels are very high, with 55,000 new residents expected to come to British Columbia in each of 2008 and 2009 (all of whom will require housing). As a result, Mr. Muir predicted provincial economic growth of 2.5% in 2008 (as compared to 3.1% in 2007).

With respect to the housing market, Mr. Muir countered reports regarding low affordability and stated that housing is still relatively affordable. He noted that although the focus stays on record average housing prices (skewed by homes at the high end of the market), fully 30% of apartments sold in the Vancouver CMA in 2007 were under $250,000 and a similar percentage of houses were under $500,000. Mr. Muir also stated that the Metro Vancouver market is entering a balance between listings and sales, which should result in less upward pressure on prices. He predicted 9% growth in housing prices in Metro Vancouver in 2008. Mr. Muir also noted that the top performing housing markets in British Columbia in 2007 in terms of price gains were outside the metropolitan areas, with gains of 20% to 30% year over year in smaller markets such as Nanaimo, Kamloops and Kelowna. He expects this trend to continue into the future as increasing numbers of baby boomer retirees seek housing with recreation and other amenities in smaller markets.