Steve Flynn  RE/MAX Crest Realty- Burnaby 

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The Canadian economy grew  0.1 per cent on a monthly basis in January as weather and labour disputes offset more positive developments in some sectors.  Before the abrupt change in the world economy due to the COVID-19 outbreak, the Canadian economy was set to grow a solid 1.8 per cent in the first quarter.  We may start to see the impact of COVID-19 starting with February's GDP data though the impact will mostly be observed in April, which is likely to show an unprecedented decline in economic activity.

Once the outbreak is contained, the Canadian economy should post a strong recovery due to pent-up demand, large amounts of fiscal stimulus and historically low interest rates.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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For the second time this month, the Bank of Canada has lowered its overnight policy rate before its regularly scheduled announcement date, taking the overnight rate down a further 50 basis points to 0.25 per cent.  That level is what the Bank considers its effective lower bound, meaning it can not reduce rates further without potentially disrupting key short-term funding markets.

The Bank also announced two new programs to ensure the continued smooth functioning of credit markets and to promote credit availability.  The first, the Commercial Paper Purchase Program, is targeted at alleviating strains in the short-term funding market  and the second entails the Bank purchasing Government of Canada bonds in the secondary market. The latter program is a type of what is generally called "quantitative easing" though the Bank's program is targeted at all maturities, rather than longer term yields as in traditional quantitative easing.


All of these actions represent a serious and significant amount of firepower aimed at keeping the Canadian financial system and credit markets functioning during this extraordinary time.  If successful, we should see currently elevated risk spreads on mortgage products start to decline, reversing recent increases in Canadian mortgage rates.



Copyright British Columbia Real Estate Association. Reprinted with permission.


 
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A weak report to start off 2020. Seasonally-adjusted Canadian retail sales were up by 0.4% in January at $52 billion. The rise in January was driven by auto dealers and gas stations. Minus these two sub-sectors and sales were down 0.3% in the month. Sales were up in 4 of 11 sub-sectors, representing 48% of retail sales. The impact of COVID-19 on the retail sector will become more evident in the months to come. Statistics Canada notes that respondent comments for February shows that business activities have been impacted. 

Regionally, 8 of 10 provinces reported monthly increases in January. Notable increases were reported in Quebec (1.7%) and Alberta (1.6%). In contrast, retail sales were down in Ontario (-0.8%).

In BC, seasonally-adjusted retail sales were unchanged at $7.3 billion in January. Looking at the non-seasonally adjusted change shows a different picture. Retail sales in January were down from the previous month in all sub-sectors, except at auto dealers and gas stations. Meanwhile, Vancouver reported a monthly decrease of 1% in retail sales. Compared to the same time last year, BC retail sales were down by 0.4% in January.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 2.2 per cent in February year-over-year, down from a 2.4 per cent increase in January. Excluding the impact of gasoline prices, national CPI rose by 2.0 per cent year-over-year, matching last month's increase. Gas prices rose less on a year-over-year basis as a result of lower global demand following the COVID-19 spread, and tensions between oil-producing countries. The Bank of Canada's three measures of trend inflation was unchanged, averaging 2.0 per cent in February. Prices rose in seven of eight major components, led by transportation (4.4%) and shelter (2.3%). 

In B.C., CPI grew to 2.4 per cent year-over-year, slightly above last month's increase of 2.3 per cent. Notable increases in prices were for recreation (2.0%) and gas (1.7%), where the increase for gas was largely due to the regional Pacific Northwest market. In contrast, prices for food was the only componenet to report a price decline (-0.5%). 

Given recent events around the spread and containment efforts of COVID-19 (e.g., temporary closure of stores and service providers), continued tensions between oil-producing countries, the lowering of interest rates, and disruptions to global supply chains, we expect significant impact on prices going forward. 



Copyright British Columbia Real Estate Association. Reprinted with permission.


 


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New property listed in Collingwood VE, Vancouver East

I have listed a new property at 705 3520 CROWLEY DR in Vancouver.
OPEN & bright bachelor suite in VANCOUVER! Very efficient 412 sq ft, w/new kitchen w/s-s appliances & granite c-tops + in-suite laundry. Good-sized balcony facing west. Great VIEWS of Gaston Park & city & peek-a-boo mountain view. Very well-maintained building & proactive strata. Amenities incl: gym & lounge & outdoor mini park. Excellent location, everything is within 5-10 min walk: Skytrain, groceries, banks, cafes, parks, etc. Pets & rentals allowed! Viewings by appointment only, no Open Houses, thanks.
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Today, in an emergency inter-meeting policy action, the Bank of Canada again lowered its overnight rate by 50 basis points to 0.75 per cent. This follows the previous cut to 1.25 per cent on March 4, 2020. This move is in response to the spread of COVID-19, which according to the Bank is "having serious consequences for Canadian families, and for Canada's economy". In its statement, the Bank noted that lower interest rates will help to support confidence in households by lowering borrowing costs for new purchases and for those renewing their mortgages. Additionally, lower prices for oil will weigh heavily on the economy. 

We expect this rate cut to be followed by an additional reduction of the Bank's overnight rate at its April 2020 meeting. 



Copyright British Columbia Real Estate Association. Reprinted with permission.


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Canadian housing starts decreased by 1.9% m/m in February to 210,069 units at a seasonally adjusted annual rate (SAAR). The decrease was driven by Quebec. The trend in national housing starts fell, averaging about 209,000 units SAAR over the past six months. 

In BC, housing starts rose by 52% m/m to 39,968 units SAAR, which follows last month's 39% decline. Increases were reported in both the single detached (23%) and multi-unit (66%) segments. The value of building permits in the province also increased, suggesting housing starts will continue to pick-up. Compared to the same time last year, provincial starts were up by 3%.  

Looking at census metropolitan areas in BC: 

- Housing starts in Vancouver were up by 56% in February to 20,573 units SAAR. The increase was driven mostly by the multi-unit segment (64%), while singles were also up (27%). Compared to last year in February, housing starts were down by 18%.  

- In Victoria, housing starts were up by 778% m/m to 5,897 units SAAR, which follows last month's very low 672 units. Compared to a year ago in February, housing starts were up by 42%.  

- In Kelowna, housing starts increased by 144% m/m to 3,883 units SAAR. The increase was due to the volatile multi-unit segment. Year-over-year starts were up by 1,129% in the region. 

- Monthly housing starts in Abbotsford-Mission were down by 9% at 2,727 units SAAR. Compared to the same time last year, new home construction was up by 82%.  



Copyright British Columbia Real Estate Association. Reprinted with permission.



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Canadian employment was little changed in February, increasing by 30,000 jobs (0.2%). The unemployment rate increased by 0.1 percentage points to 5.6%, as more people searched for work. This report does not yet account for impacts arising from COVID-19 due to the survey's timing. 

Regionally, increases were primarily in Quebec (20,000), Alberta (11,000), Nova Scotia (3,700) and Manitoba (3,200). In February, more people were employed in wholesale and retail trade, in manufacturing, and in information, culture and recreation. Compared to the same month last year, Canadian employment was up by 1.3%.   

Meanwhile, employment in BC fell by 6,500 jobs (-0.3%) in February, following last month's increase of 3,400 jobs. Part-time work was the main driver of the decrease. By industry, employment losses were reported in two-thirds of the sub-sectors. The provincial unemployment rate rose by 0.5 percentage points to 5.0%. Compared to one year ago, employment in BC is down by 0.4% (11,400) jobs. 



Copyright British Columbia Real Estate Association. Reprinted with permission.



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The Bank of Canada lowered its overnight rate by 50 basis points this morning to 1.25 per cent.  This move is part of a coordinated action by global central banks to guard against the negative consequences of the Coronavirus outbreak.  In its statement, the Bank noted that although the Canadian economy is operating near potential and inflation is at its 2 per cent target, the Coronavirus is a material and negative shock to the Canadian and global outlook.

Economic growth in Canada slowed sharply to end 2019 and supply chain disruptions due to both Coronavirus and interrupted rail service are expected to slow growth further in the first quarter of this year.

Canadian bond yields have  declined significantly with 5-year bond yields falling below 1% for the first time since 2017.  Both variable and 5-year fixed qualifying mortgage rates will likely follow bond yields lower,  though elevated risk spreads may delay banks and other lenders in lowering mortgage rates in the immediate term.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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Steady demand and low supply benefits home sellers across Metro Vancouver*:

 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,150 in February 2020, a 44.9 per cent increase from the 1,484 sales recorded in February 2019, and a 36.9 per cent increase from the 1,571 homes sold in January 2020.

 

Last month’s sales were 15.6 per cent below the 10-year February sales average. “Home buyer demand again saw strong year-over-year increases in February while the total inventory of homes for sale struggled to keep pace,” Ashley Smith, REBGV president said. “This was most pronounced in the condominium market.”

 

There were 4,002 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2020. This represents a 2.8 per cent increase compared to the 3,892 homes listed in February 2019 and a 3.4 per cent increase compared to January 2020 when 3,872 homes were listed.

 

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,195, a 20.7 per cent decrease compared to February 2019 (11,590) and a 6.7 per cent increase compared to January 2020 (8,617).

 

"Our Realtors are reporting increased traffic at open houses and multiple offer scenarios in certain pockets of the market. If you’re considering listing your home for sale, now is a good time to act with increased demand, reduced competition from other sellers, and some upward pressure on prices," says Smith.

 

For all property types, the sales-to-active listings ratio for February 2020 is 23.4 per cent. By property type, the ratio is 17.3 per cent for detached homes, 26.9 per cent for townhomes, and 28.4 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 MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,020,600. This represents a 0.3 per cent increase over February 2019 and a 2.7 per cent increase over the past six months.

 

Sales of detached homes in February 2020 reached 685, a 52.9 per cent increase from the 448 detached sales recorded in February 2019. The benchmark price for a detached home is $1,433,900. This represents a 0.7 per cent decrease from February 2019 and a 1.9 per cent increase over the past six months.

 

Sales of apartment homes reached 1,061 in February 2020, a 39.8 per cent increase compared to the 759 sales in February 2019. The benchmark price of an apartment property is $677,200. This represents a 0.9 per cent increase from February 2019 and a 3.6 per cent increase over the past six months.

 

Attached home sales in February 2020 totalled 404, a 45.8 per cent increase compared to the 277 sales in February 2019. The benchmark price of an attached home is $785,000. This represents a 0.6 per cent increase from February 2019 and a 1.7 per cent increase over the past six months.



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.



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I have sold a property at 11 628 MCCOMBS DR in Harrison

I have sold a property at 11 628 MCCOMBS DR in Harrison.
Impressive 1,986 sq/ft of luxury living! 11' ceilings in the Foyer and Great Room featuring a floor to ceiling stone fireplace with wood mantle. Roomy master bedroom boasts walk in with custom closet organizers, & ensuite with double sinks, in floor heat, quartz counters & stylish tile. Custom kitchen cabinetry with under counter lighting, quartz counters and a spacious island. Upstairs offers large bedroom, rec-room & 4 piece bath, perfect for guests. Spacious covered patio for entertaining, and a fully fenced and landscaped yard. Double garage plus 20' driveway. This unit will be completed end of April 2020. Measurements taken from plans, verify if deemed important.
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