The Canadian economy grew by 0.1% in September, following the same growth in the previous month. Services reported growth of 0.2%, slightly outpacing growth in goods (+0.1%). There were gains in 13 of 20 industries, with increases in wholesale trade and construction offset in part by lower activity in rail transportation. Activity at offices of real estate agents and brokers increased 1.2% in September, rising for the seventh consecutive month, primarily due to higher housing resale activity in Vancouver and Fraser Valley.

Rounding out the third quarter, Canada's economy grew by 1.3%, led by strong business investment (+2.6%) and household spending (+0.4%), while exports were down by 0.4% and imports were unchanged. Of note was growth in housing investment (+3.2%), which recorded the fastest pace since the first quarter of 2012. The increase was driven by both new home construction (mostly detached homes in Ontario) and higher ownership transfer costs from resales activity in B.C. and Ontario.

We expect growth in the Canadian economy will moderate to around 1.5 per cent in the second half of 2019 after posting strong second quarter growth and will post trend growth of about 1.8 per cent in 2020. Significant downside risks remain due to elevated trade tensions and their consequent impact on exports and business investment.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Seasonally-adjusted Canadian retail sales fell by 0.1% in September to $51.6 billion (after an upwardly revised 0.1% in August), driven by lower sales at motor vehicle and parts dealers and at gasoline stations. Retail sales were down in 6 of 11 sub-sectors. Regionally, 7 of 10 provinces reported declines in September with notable declines in Alberta (-1.6%) and New Brunswick (-3.7%).

In B.C., seasonally-adjusted retail sales fell by 0.2% to $7.2 billion in September, driven by a decline in sales at motor vehicle and parts dealers and in food and beverage stores. Vancouver also reported a monthly decrease of 0.9% in sales. Declining provincial sales were reported in all sub-sectors except for building material and garden equipment. Compared to the same time last year, B.C. retail sales were down by 0.8% in September.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 1.9 per cent in October year-over-year, matching the increase in September. This marks 7-months of consecutive year-over-year growth in the CPI. Excluding the impact of higher gasoline prices, the CPI rose by 2.3 per cent year-over-year. The Bank of Canada's three measures of trend inflation remain unchanged to average 2 per cent in October.

In B.C., CPI slowed to 2.2 per cent year-over-year, down from 2.4 per cent in September. The decline was largely driven by recreation, education and reading, while notable increases were reported in gasoline, transportation and clothing and footwear prices. 

With Canadian inflation hovering at 2 per cent, the Bank of Canada will likely continue its dovish-to-neutral tone. The Bank will need to see a deterioration in the economic indicators before taking action.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – November 13, 2019

The British Columbia Real Estate Association (BCREA) reports that a total of 7,666 residential unit sales were recorded by the Multiple Listing Service^® (MLS^®) in October, an increase of 19.3 per cent from the same month last year. The average MLS^® residential price in the province was $724,045, an increase of 5.1 per cent from October 2018. Total sales dollar volume was $5.55 billion, a 25.4 per cent increase from the same month last year.  

“Most markets around the province are returning to a more typical level of sales activity,” said BCREA Chief Economist Brendon Ogmundson. “That recovery in sales and slower listings activity is putting upward pressure on prices in many markets.”

MLS^® residential active listings in the province were up 1 per cent from September 2018 to 36,567 units, although down slightly when compared on a seasonally adjusted basis. With sales and listings down, overall market conditions in the province have tightened, with a sales-to-active listings ratio of 21 per cent.

Year-to-date, BC residential sales dollar volume was down 9 per cent to $45.3 billion, compared with the same period in 2018. Residential unit sales were 6.2 per cent lower at 65,468 units, while the average MLS^® residential price was down 3 per cent year-to-date at $691,618.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Click below for a very informative October market update:

Canadian housing starts decreased by 8.7% in October to 201,973 units at a seasonally adjusted annual rate (SAAR). The decline was due to a pullback in the multi-unit segment. The trend in national housing starts continues to be healthy, averaging 218,598 units SAAR over the past six months. 

In BC, housing starts declined by 16% on a monthly basis to 33,174 units SAAR, largely due to falling construction in the multi-unit segment. The decline is an unwinding of developers pushing forward activity in the previous months to get ahead of a new development charge in Vancouver. Compared to the same time last year, provincial starts were up by 9%. On a monthly basis, multi-unit starts were down by 22%, while singles were up by 10%.

Looking at census metropolitan areas in BC: 

-Housing starts in Vancouver were down by 37% in October at 15,657 units SAAR, driven entirely by the multi-unit segment. Compared to last year in October, housing starts in Vancouver were down by 11%. 

-In Victoria, housing starts were down by 36% on a monthly basis to 3,880 units SAAR, following last month's highest recording of starts since December 2018. Compared to a year ago, housing starts were up by 43%.

-In Kelowna, housing starts increased by 155% in October to 3,870 units SAAR. Year-over-year starts were up by 423% in the region. 

-Monthly housing starts in Abbotsford-Mission were up by 13% at 2,335 units SAAR. Compared to this time last year, new home construction was up by 34%.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – November 7, 2019.

The British Columbia Real Estate Association (BCREA) released its 2019 Fourth Quarter Housing Forecast today:

Multiple Listing Service^® (MLS^®) residential sales in the province are forecast to decline 1.8 per cent to about 77,100 units this year, after recording 78,505 residential sales in 2018. MLS^® residential sales are forecast to increase 10.9 per cent to 85,500 units in 2020, just below the 10-year average for MLS^® residential sales of 85,800 units.

“After a slow start to 2019, MLS^® home sales in BC have embarked on a sustained upward trend since the spring,” said Brendon Ogmundson, BCREA Chief Economist. “The dampening effects of federal mortgage rules mean that rather than a return to the heights of recent years, home sales are simply returning to trend after sustaining a significant shock.”  

As demand normalizes, the accumulation of resale inventory has reversed course in many markets around BC. We anticipate that this trend will continue in 2020, with sales and listings finding balance. For most markets, this will mean price growth that is in-line with inflation, though for some supply-constrained areas we are forecasting strong price growth. We anticipate that the MLS^® average price will decline 2 per cent in 2019 before rising modestly by 3.6 per cent to $723,000 in 2020. 

Copyright British Columbia Real Estate Association. Reprinted with permission.

Home buyer activity significantly increases in October 2019:

The Real Estate Board of Greater Vancouver* (REBGV) reports that residential home sales in the region totalled 2,858 in October 2019, a 45.4 per cent increase from the 1,966 sales recorded in October 2018, and a 22.5 per cent increase from the 2,333 homes sold in September 2019.

Last month’s sales were 9.8 per cent above the 10-year October sales average.

“Home buyers have more confidence today than we saw in the first half of the year,” says Ashley Smith, REBGV president. “With prices edging down over the last year and interest rates remaining low, hopeful home buyers are becoming more active this fall.”

There were 4,074 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2019. This represents a 16.4 per cent decrease compared to the 4,873 homes listed in October 2018 and a 16.3 per cent decrease compared to September 2019 when 4,866 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,236, a 5.8 per cent decrease compared to October 2018 (12,984) and a nine per cent decrease compared to September 2019 (13,439).

For all property types, the sales-to-active listings ratio for October 2019 is 23.4 per cent. By property type, the ratio is 17.3 per cent for detached homes, 26.2 per cent for townhomes, and 29 per cent for apartments.

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

“The recent uptick in home sales is moving us into a more historically typical market,” Smith said. “Both sale and listing activity is trending around our long-term averages in recent months.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $992,900. This represents a 6.4 per cent decrease from October 2018, a 1.7 per cent decrease over the past six months, and a 0.2 per cent increase compared to September 2019.

Sales of detached homes in October 2019 reached 938, a 47.3 per cent increase from the 637 detached sales recorded in October 2018. The benchmark price for a detached home is $1,410,500. This represents a 7.5 per cent decrease from October 2018, a 1.3 per cent decrease over the past six months, and a 0.3 per cent increase compared to September 2019.

Sales of apartment homes reached 1,384 in October 2019, a 40.5 per cent increase compared to the 985 sales in October 2018. The benchmark price of an apartment home is $652,500. This represents a 5.9 per cent decrease from October 2018, a 2.2 per cent decrease over the past six months, and a 0.2 per cent increase compared to September 2019.

Attached home sales in October 2019 totalled 536, a 55.8 per cent increase compared to the 344 sales in October 2018. The benchmark price of an attached home is $771,600. This represents a 5.8 per cent decrease from October 2018, a 0.4 per cent decrease over the past six months, and a 0.5 per cent increase compared to September 2019.

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

Copyright British Columbia Real Estate Association. Reprinted with permission.

The Canadian economy grew by 0.1% in August, following no growth in July. The goods producing industries reported growth of 0.2% after two months of declines, led by a rebound in manufacturing primarily due to increased sales. A decline of 0.1% was reported in the services producing industries, largely due to decreases in wholesale trade and utilities. Activity at offices of real estate agents and brokers increased 1.8% in August, as housing re-sale activity was up in the majority of Canadian urban markets.

We expect growth in the Canadian economy will moderate to around 1.5 per cent in the second half of 2019 after posting strong second quarter growth and will post trend growth of about 1.8 per cent in 2020. Significant downside risks remain due to elevated trade tensions and their consequent impact on exports and business investment.

Copyright British Columbia Real Estate Association. Reprinted with permission.