BC should expect an economic slowdown over the next three years, according to a report released Thursday by credit union Central 1.

Its BC Economic Forecast looked at several market factors, including changes to the province’s housing market policies, the labour market, and LNG developments.

See also New green building standards could create $3.3B in Metro Vancouver market demand: report

1-in-10 condos in Vancouver have non-resident owners: report

January saw highest one-month Canadian rental rate spike in 30 years: StatsCan

But while it is expecting the economy to constrict for three years, it is not expecting a full-blown recession.

The report cites the policy-induced housing market downturn weighing temporarily on GDP growth in BC.

That housing slump that is pushing down demand and prices will trigger a sharp contraction in housing construction and “the most pronounced drop in broader residential development since 2009.”

The slump for real estate will have spinoff effects too, it says: “The current down cycle in demand leads to higher new home inventory and reduced condominium pre-sale activity forcing developers to delay construction or cancel projects.”

It believes that multi-family housing starts will drive most of the decline and be concentrated in Metro Vancouver.

A bright spot in the bleak outlook is a sharp rotation to capital investment, including LNG build-outs, which the credit union says will be an important offset to the downturn in real estate.