The Canadian economy expanded at a 3.5 per cent annual rate in the third quarter, a sharp rebound following a 1.3 per cent decline in the second quarter.  Household consumption remained  a significant driver of economic growth last quarter, aided by a rise in disposable incomes, while export growth posted a strong rebound after declining in the second quarter. A build up in business inventories suggests that growth will moderate closer to trend growth of 2 per cent in subsequent quarters. Overall, the Canadian economy is on trace to grow just 1.2 per cent in 2016. 

 
While there are clear downside risks to the Canadian economy over the next year, with the uncertainty introduced by the incoming Trump administration front and centre, we expect the Canadian economy will post stronger growth in 2017. The US economy is improving and could see a further short-term uptick in growth if Congress approves of the incoming administration’s more stimulative ideas. Moreover, higher oil prices will boost growth in Canadian exports and stabilize the economies of Canada’s energy producing regions. Overall, we are forecasting growth of 2.1 per cent next year and 2.3 per cent in 2018. Despite stronger growth and inflation gradually returning to its 2 per cent target, we expect that the elevated level of uncertainty, particularly with regard to international trade, will keep the Bank of Canada sidelined through 2017.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – November 29, 2016. The British Columbia Real Estate Association (BCREA) released its 2016 Fourth Quarter Housing Forecast today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to climb 11 per cent to a record 113,800 units this year, eclipsing the previous record of 106,310 units in 2005. Less robust economic conditions combined with government policy constraints are expected to slow housing demand by more than 15 per cent to 96,300 units in 2017. However, housing demand is expected to remain well above the ten-year average of 85,000 unit sales.

“"Housing demand across the province is expected to moderate next year as declining affordability related to rising prices and government policy interventions limit the number of eligible buyers," said Cameron Muir, BCREA Chief Economist. "However, while home sales are not expected to repeat this year's record performance, consumer demand is expected to remain well above the ten-year average."

The average MLS® residential price in the province is forecast to increase 9.8 per cent to $698,900 this year. The supply of homes for sale is expected to trend higher next year as moderating demand is met with added new home completions. A trend toward more balance in the market will unfold next year and exert less upward pressure on home prices. In addition, a larger contraction in the number high-end home sales will contribute to moving the aggregate average price statistic lower. As a result, the average MLS® residential price in the province is forecast to decline 6.4 per cent to $654,200 in 2017.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian retail sales rose 0.6 per cent in September, following several months of relatively flat sales.   Sales growth was broad based with 7 of 11 sub-sectors reporting higher volumes. Strong retail sales growth in September caps a robust third quarter all around. We are currently tracking third quarter Canadian real GDP growth at 3.7 per cent. 

Strong consumer spending continues to drive economic growth In BC. Retail sales increased  0.9 per cent on a monthly basis in September and were 5.7 per cent higher year-over-year. Year-to-date, retail sales are up 6.4 per cent.   

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Canadian manufacturing sales rose 0.3 per cent in September, the fourth consecutive monthly increase. Sales were higher in 12 of 21 manufacturing sub-sectors, however after adjusting for inflation, the total volume of sales was actually down 0.2 per cent. 

In BC, where the manufacturing sector employs approximately 170,000 people and is a key driver of economic growth, sales were up 0.6 per cent on a monthly basis and 7.8 per cent year-over-year. A strengthening manufacturing sector in recent months, and in particular a growing forestry sector, has helped BC maintain its Canada leading rate of economic growth, which we estimate to be around 3.5 per cent through the first nine months of the year.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – November 15, 2016. The British Columbia Real Estate Association (BCREA) reports that 7,272 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in October, down 16.7 per cent from the same month last year. Total sales dollar volume was $4.4 billion in October, down 24.2 per cent compared to the previous year. The average MLS® residential price in the province was $606,787, a decline of 9.1 per cent compared to the same month last year.

"Housing demand remained mixed across the province in October," said Cameron Muir, BCREA Chief Economist. "Home sales across the Lower Mainland were down from the elevated levels of one year ago, but stabilized on a month to month basis. In contrast, home sales on Vancouver Island and in the interior of the province continue to post strong year-over-year gains."

"The decline in the average residential price reflects a smaller proportion of transactions in the province originating in Vancouver," added Muir. Home sales through the Real Estate Board of Greater Vancouver fell to 31.4 percent of BC transactions last month, compared to 42.6 per cent a year ago.

Year-to-date, BC residential sales dollar volume increased 27.4 per cent to $70.4 billion, when compared with the same period in 2015. Residential unit sales climbed by 15 per cent to 101,069 units, while the average MLS® residential price was up 10.8 per cent to $696,992.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Home sale and listing activity dip below historical averages in October