Vancouver, BC – February 28, 2016.

The BCREA Commercial Leading Indicator (CLI) increased for the fourth consecutive quarter, rising 1.5 index points from the third to fourth quarter. The index now sits at 123.9, a 5 per cent increase from a year ago, and about a 1.2 per cent gain on a quarterly basis.

“The CLI was propelled higher by strong fourth quarter growth in the BC economy," says BCREA Economist Brendon Ogmundson. "The strength of the underlying BC economy, particularly relative to the rest of Canada, makes BC a very attractive destination for commercial investment."

Five straight quarters of rising BC manufacturing sales and a second consecutive year of more than 6 per cent growth in retail sales has driven the CLI to new heights this year. The underlying CLI trend, which smooths often noisy economic data, continues to push higher due to several quarters of strong economic statistics. That uptrend signals further growth in investment, leasing and other commercial real estate activity over the next two to four quarters.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – February 22, 2017.

On the heels of multiple government announcements in 2016 and early 2017, the British Columbia Real Estate Association (BCREA) welcomes the latest: an increase in the Property Transfer Tax exemption threshold for first-time buyers, announced in Budget 2017. The increase, to $500,000 from $475,000, takes effect today.

BCREA appreciates this government’s attention to the needs of first-time homebuyers. To keep pace with the dynamic real estate market and ensure that homebuyers aren’t left behind, the Association strongly believes that this threshold—and all others related to the Property Transfer Tax—should be indexed, with adjustments made annually.

During Minister de Jong’s budget consultation in January, BCREA recommended that the first-time buyer exemption be increased to $750,000. That number would align with the exemption for newly-built homes and with the BC HOME Partnership program. This measure would have expanded consumer choices, because the First Time Home Buyers’ Program exemption applies to all homes, rather than only newly-built homes, which are often out of reach of first-time buyers.

BCREA also looks forward to learning more about the provincial government’s plans to partner with local governments to increase housing supply. Specifically, the Association supports incentives that result in faster housing and development approval processes, as well as increased density of family-oriented homes along transit corridors.

For more information on BCREA’s recommendations on market housing affordability visit: 

www.bcrea.bc.ca/government-relations/affordability

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian retail sales fell 0.9 per cent in December, following three consecutive months of solid gains. A decline in new car sales accounted for the majority of the decline at the sub-sector level, though overall holiday sales were weaker on a monthly basis. For all of 2016, Canadian retail sales rose a healthy 3.7 per cent.   Given today's data,  we are currently tracking fourth quarter Canadian real GDP growth at 2 per cent. 

In BC, retail sales were down 0.3 per cent on a monthly basis, but were 7.5 per cent higher year-over-year. A strong provincial economy and the creation of 72,000 jobs over the course of 2016 helped push retail sales 6.5 per cent higher for the year, the second consecutive year of 6 per cent or greater growth in retail sales. 

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian manufacturing sales finished the year on a high note, rising 2.3 per cent in December and matching the strong sales growth in November. However, strength in shipments was not broad based with sales higher in only 8 of 21 manufacturing sub-sectors.

In BC, where the manufacturing sector is a significant employer and a key driver of economic growth, sales decreased 1.5 per cent on a monthly basis but were 7.6 per cent higher year-over-year. While sales dipped slightly from a very strong November, the manufacturing sector remained a bright spot for the province in the second half of the year, posting nearly 8 per cent growth since the summer. That upswing has been a particularly important driver of growth and housing demand in BC's manufacturing regions.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – February 15, 2017.

The British Columbia Real Estate Association (BCREA) reports that a total of 4,487 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in January, down 23 per cent from the same period last year. Total sales dollar volume was $2.79 billion, down 36.5 per cent from January 2016. The average MLS® residential price in the province was $621,093, a 17.5 per cent decrease from the same period last year.

“Housing demand across the province returned to long-term average levels last month," said Cameron Muir, BCREA Chief Economist. "However, regional variations persist, with Victoria posting above average performance and Vancouver falling below the average."

“A marked decrease in the average MLS® residential price is largely the result of relatively more home sales occurring outside of the Lower Mainland," added Muir.

Home sales from Vancouver fell from 43 per cent of provincial transactions in January 2016 to 35 per cent last month. In addition, fewer detached home sales in Vancouver relative to multi-family units has skewed the average price statistic down in the province's largest urban area. In contrast, the MLS® Residential Benchmark Price in the Real Estate Board of Greater Vancouver area has declined 3.7 per cent over the past six months, but is up 15.6 per cent from January 2016.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – February 17, 2017.

The British Columbia Real Estate Association (BCREA) released its 2017 First Quarter Housing Forecast Update today. Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 14.1 per cent to 96,345 units this year, after reaching a record 112,209 units in 2016. A moderation trend that began early in 2016, combined with tougher federal government mortgage qualification rules and the foreign buyer tax in Vancouver, is expected to limit consumer demand over the next two years.However, housing demand is expected to remain well above the ten-year average of 84,700 unit sales.

“Solid fundamentals continue to underpin housing demand in the province," said Cameron Muir, BCREA Chief Economist. "International trade, population growth and consumer confidence will be key economic drivers this year." Of note, net migration to the province exceeded 50,000 individuals during the first three quarters of 2016, the highest level since 2008 and a 50 per cent increase from the previous year.

The average MLS® residential price in the province is forecast to decline nearly 5 per cent to $657,000 this year, largely the result of increased consumer demand for multi-family homes and a higher proportion of transactions occurring outside the Metro Vancouver market. While a significant number of new homes are under construction in the province, market conditions will continue to be tilted in favour of home sellers in many regions, while home builders scramble to complete existing projects.

Copyright British Columbia Real Estate Association. Reprinted with permission.

US Non-farm payroll employment registered an increase of 227,000 jobs for the month of January while the national unemployment rate edged up slightly to 4.8 per cent. Over the past three months, US job growth has averaged a solid 185,000 jobs per month. 

Today's strong employment report suggests some underlying momentum in the economy and very little slack in the overall labour market. The US Federal Reserve opted to leave rates unchanged earlier this week, but is still on track to raise rates more than once this year.  Expectation of further Fed tightening will put upward pressure on long-term interest rates in the US and Canada, which will likely contribute to higher Canadian mortgage rates in 2017.  

Copyright British Columbia Real Estate Association. Reprinted with permission.

Metro Vancouver housing market off to a quieter start than last year

The Canadian economy posted strong growth in the month of November, with real GDP rising 0.4 per cent on a monthly basis. The increase was largely the result of a strong recovery in the manufacturing sector, which had posted a significant decline in October. Of note, the real estate sector posted its first monthly decline since 2012, likely the result of tighter mortgage regulations introduced in October 2016. 

Growth in the Canadian economy is estimated to have decelerated in the fourth quarter of 2016 to 1.7 per cent from the wild-fire recovery induced 3.5 per cent growth in the third quarter. We estimate the Canadian economy posted meager 1.3 per cent growth for the year as a whole, but forecast a modest uptick to 2.2 per cent for 2017.  

Copyright British Columbia Real Estate Association. Reprinted with permission.