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Vancouver, BC - December 12, 2017


The British Columbia Real Estate Association (BCREA) reports that a total of 7,731 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November, an increase of 20.4 per cent from the same period last year. Total sales dollar volume was $5.59 billion, up 39.1 per cent from November 2016. The average MLS® residential price in the province was $723,112, up 15.5 per cent from November 2016.

 

 

 

November was the third consecutive month that BC home sales were above 9,000 units, on a seasonally adjusted basis," said Cameron Muir, BCREA Chief Economist. "Elevated consumer demand is being supported by strong employment growth, rising wages and favourable demographics."

 

BC employment increased 3.8 per cent over the last 12 months, totaling over 90,000 jobs. Over the same period, average hourly wages in the province climbed 5.7 per cent to $26.82. Against this backdrop, a large cohort of millennials is entering their household-forming life stage. In addition, some buyers are likely completing purchases now in advance of tighter conventional mortgage qualifications, scheduled for the new year.

 

Year to date, BC residential sales dollar volume was down 6.8 per cent to $69.4 billion, when compared with the same period in 2016. Residential unit sales declined 8.8 per cent to 98,024 units, while the average MLS® residential price increased 2.2 per cent to $708,150.

 

 

Copyright British Columbia Real Estate Association. Reprinted with permission.


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Canadian housing starts surged in November, rising 13 per cent from October to 252,184 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts jumped to 226,270 units SAAR, the highest its been in ten years.

The increase in new home construction was concentrated outside of BC, which saw starts decline 16 per cent to a still very strong 45,000 units SAAR in November on a monthly basis. Total starts in BC were up about 4 per cent year-over-year. Single detached starts were up 23 per cent on a monthly basis and 31 per cent compared to November 2016 while multiple starts were down 24 per cent month-over-month and fell 6 per cent year-over-year.

Looking at census metropolitan areas (CMA) in BC: 

  • Total starts in the Vancouver CMA declined from a 12-month high in October, falling 8 per cent. The market is likely close to full-capacity with close to 40,000 units under construction across the metro-Vancouver area.

  • In the Victoria CMA, housing starts fell 17 per cent year-over-year and were down 71 per cent on a monthly basis after a wave of new multiple units in October.

  • New home construction in the Kelowna CMA were up 32 per cent from October and increased 62 per cent year-over-year due to jump in multiple unit starts.
  • Housing starts in the Abbotsford-Mission CMA jumped from just 20 total starts in November 2016 to 169 in November 2017.  On a monthly basis, starts were 45 per cent higher compared to October due primarily to an increase in single-family starts.  
 

Copyright British Columbia Real Estate Association. Reprinted with permission.


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The Bank of Canada maintained its target for the overnight rate at 1 per cent this morning. In the statement accompanying the decision, the Bank noted that the Canadian economy is evolving as expected, with growth slowing in the second half of the year.   On inflation, the Bank expects the continued absorption of economic slack to push core inflation higher in subsequent months.  Importantly, the Bank concluded its statement by noting that rate increases will be required over time, though it will proceed with caution as it assesses the economy’s sensitivity to higher rates.

Although the Bank of Canada has a bias toward raising rates over the next 12 months, it is currently sidelined by low inflation as well as concerns over how higher interest rates will interact with elevated household debt levels.  We anticipate the Bank will remain on hold in early 2018 as it assesses the impact of the forthcoming mortgage stress test, but will look to raise rates one or two times in the second half of next year.


 

Copyright British Columbia Real Estate Association. Reprinted with permission.

 


 


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Metro Vancouver continues to experience above-average demand and below-average supply

Metro Vancouver* saw modest home listing changes and steady demand in November:

 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,795 in November 2017, a 26.2 per cent increase from the 2,214 sales recorded in November 2016, and a 7.5 per cent decrease compared to October 2017 when 3,022 homes sold. Last month’s sales were 17 per cent above the 10-year November sales average.

 

“We’re seeing steady demand in today’s market. Home buyer activity is operating above our long-term averages, particularly in our townhome and condominium markets,” Jill Oudil, REBGV president said.

 

There were 4,109 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2017. This represents a 30.6 per cent increase compared to the 3,147 homes listed in November 2016 and a 9.5 per cent decrease compared to October 2017 when 4,539 homes were listed.

 

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,747, a 4.3 per cent increase compared to November 2016 (8,385) and a 4.3 per cent decrease compared to October 2017 (9,137).

“While we’re seeing more listings enter the market today than we saw at this time last year, we have a long way to go before our home listing inventory rises back to more historically typical levels,” Oudil said.

 

The sales-to-active listings ratio for November 2017 is 32 per cent, which is up three per cent since September 2017. By property type, the ratio is 15.9 per cent for detached homes (up one per cent since September 2017), 36.4 per cent for townhomes (down six per cent since September 2017), and 67.8 per cent for condominiums (up seven per cent since September 2017).

 

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,046,900. This represents a 14 per cent increase over November 2016 and a 0.4 per cent increase compared to October 2017.

 

Sales of detached properties in November 2017 reached 841, a 31.8 per cent increase from the 638 detached sales recorded in November 2016. The benchmark price for detached properties is $1,608,000. This represents a 6.1 per cent increase from November 2016 and a 0.1 per cent decrease compared to October 2017.

 

Sales of apartment properties reached 1,508 in November 2017, a 25.7 per cent increase compared to the 1,200 sales in November 2016. The benchmark price of an apartment property is $648,200. This represents a 23.9 per cent increase from November 2016 and a one per cent increase compared to October 2017.

 

Attached property sales in November 2017 totalled 446, an 18.6 per cent increase compared to the 376 sales in November 2016. The benchmark price of an attached unit is $805,200. This represents a 17.9 per cent increase from November 2016 and a 0.3 per cent increase compared to October 2017.

 

 

*Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.

 

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The Canadian economy grew 1.7 per cent in the third quarter, a significant deceleration from the over 4 per cent growth recorded in the previous quarter. Growth was led by gains in household spending while exports declined and business investment slowed. Despite the second half slowdown, the Canadian economy is still on track to grow more than 3 per cent this year, which would make it the envy of most advanced economies around the world.

While the economy slowed in the third quarter, employment in November surged. Canadian employment increased by 80,000 jobs while the the national unemployment rate fell 0.4 points to 5.9 per cent, the lowest rate since February 2008. In the twelve months to November, employment in Canada is up 2.1 per cent, or 390,000 jobs. In BC, a string of four straight months of declining job growth was broken as the province added 18,000 new jobs in November. Over the past twelve months, the level of employment in BC is up 3.8 per cent. The provincial unemployment rate ticked 0.1 points lower to 4.8 per cent.  


 

Copyright British Columbia Real Estate Association. Reprinted with permission.

 






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