Despite the reopening of retail outlets across the country as health restrictions eased, Canadian seasonally-adjusted retail sales declined 0.6% to $55.8 billion in July. The overall decline was driven by drops in sales at food and beverage stores (-3.4%) and building material and garden equipment and supplies dealers (-7.3%). According to Statistics Canada's survey, just 0.5% of retailers were closed at some point in July. Preliminary estimates, based on roughly 50% of respondents reporting so far to the agency, indicate that retail sales rose 2.1% in August. 

In BC, sales declined 1.2% after hitting record levels in the prior two consecutive months. Compared to the same month last year, retail sales were up 9.1% in the province. Only food and beverage store sales and health and personal care sales were not up on a year-over-year basis in July. In the Greater Vancouver region, sales dropped by 2.7% month-over-month, but were up 14.9% year-over-year. 

In July, Canadian e-commerce sales declined sharply from $3.9 billion to $2.9 billion dollars. As a result, e-commerce declined from 6.2% of total retail sales in June to 4.6% in July. This decline occurred as health restrictions eased across the country and Canadians shifted to brick-and-mortar retail. 

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian housing starts declined for the third consecutive month in August, but remain elevated by historical standards. Housing starts decreased by 10.5k to 260.2k units (-3.9% m/m) in August at a seasonally-adjusted annual rate (SAAR). Comparing year-over-year, starts were roughly unchanged from August of 2020 (-0.5% y/y). Single-detached housing starts dipped 1% in August to 80.7k, while multi-family and others declined 5% to 159.5k. 

In British Columbia, starts declined for a second consecutive month, dropping 7.5% m/m to 46.9k units SAAR in all areas of the province. Single-detached starts declined 4.4% m/m while multi-family starts declined 10%. Despite this, starts in the province in August remained 7.8% above the levels from August 2020. BC's six-month moving average for starts inched up to a record-high for a third consecutive month. 

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Canadian prices, as measured by the Consumer Price Index (CPI), rose 4.1% on a year-over-year basis in August, rising at the fastest rate since 2003. This rise was mostly the result of an accumulation of price increases in 2021, while August itself did not post high price growth. On a seasonally adjusted month-over-month basis, the CPI was up 0.2% in August. The Bank of Canada's preferred measures of core inflation (which use techniques to strip out volatile elements) rose an average of 2.6% year-over-year in August. Major drivers of the price increase included passenger vehicles (+7.2%), furniture (+8.7%) and household appliances (+5.3%) partly on continuing supply-chain difficulties related to semiconductors. The homeowner replacement cost index, which measures the cost of replacing home structures, rose 14.3% year-over-year in August, which was the fastest rate since the 1980s. Related costs, such as commissions on the sale of real estate, also rose strongly in August. In BC, consumer prices were up 0.2% month-over-month, and up 3.5% on a year-over-year basis. 

Inflation continues to run ahead of the Bank of Canada's 2 per cent target. The driving force behind rising prices is still isolated to a few categories of spending. In particular, the rising price of gasoline and the run-up in Canadian home prices since last year. Those categories alone accounted for about half of the observed inflation in August. Home prices in Canada are beginning to flatten out, which should mean a fading impact on inflation over the next year. Likewise, the impact of gas prices should continue to decline as base-year effects have less influence. Other issues putting upward pressure on consumer prices are being driven by bottlenecks and supply shortages – which are issues that monetary policy cannot address.

Copyright British Columbia Real Estate Association. Reprinted with permission.

The British Columbia Real Estate Association (BCREA) reports that a total 9,507 residential unit sales were recorded by the Multiple Listing Service^® (MLS^®) in August 2021, a decrease of 7.1 per cent over August 2020. The average MLS^® residential price in BC was $901,712, a 17.2 per cent increase from $769,691 recorded in August 2020. Total sales dollar volume was $8.6 billion, an 8.9 per cent increase from last year.

“Home sales around the province have essentially returned to normal after a record setting spring,” said BCREA Chief Economist Brendon Ogmundson. “However, we continue to see a drought in the total supply of listings as well as downward trend in new listings activity.”

Total active residential listings were down 37.9 per cent year-over-year in August and were 42 per cent below normal levels for the month of August.

Year-to-date, BC residential sales dollar volume was up 102.2 per cent to $82 billion, compared with the same period in 2020. Residential unit sales were up 67.8 per cent to 89,980 units, while the average MLS^® residential price was up 20.5 per cent to $911,245. 

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Canadian employment grew for the third consecutive month in August, rising by 90,000 to 18.97 million (0.5%, m/m). Most Canadian jurisdictions had fully implemented public health reopening plans by the time Statistics Canada conducted surveys, while tourists from the United States were allowed to enter Canada without quarantining for the first time since the pandemic began. As a result, Statistics Canada is reporting positive employment figures for the month across most indicators. Canadian employment is now -0.8% (-156k) below its February 2020 pre-pandemic level, the highest level since the onset of the pandemic.

In August, Canadian employment growth was driven by gains in the private sector and the services sector, especially in food & accommodation and information, culture and recreation sectors. Gains were broadly distributed across demographic groups. The Canadian unemployment rate declined by 0.4 to 7.1%, the lowest level since the onset of the pandemic. 

In BC, employment grew by 14,400 to 2.67 million (0.5%, m/m), once again hitting the highest level since the pandemic began. For the third consecutive month, British Columbia was the sole province with employment above its pre-pandemic level. The unemployment rate declined by 0.4 in August to 6.2%, the lowest level since the pandemic began. BC has the third lowest unemployment rate in Canada, following Manitoba and Quebec. 

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The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,176,600. This represents a 13.2% increase from August 2020 and 0.1% increase compared to July 2021. Specifically:

- The benchmark price for townhouses inceased 0.2% from July.

- The benchmark price for apartment/condos decreased 0.2% from July.

Copyright British Columbia Real Estate Association. Reprinted with permission.