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Canadian Retail Sales (December 2022) - February 24, 2023


Canadian seasonally-adjusted retail sales rose 0.5 per cent in December to $62.1 billion. Sales rose in 7 of 11 subsectors, but were led by higher sales at motor vehicle and parts dealers (+3.8 per cent) and general merchandise stores (+1.7 per cent). Core retail sales, which strips out gasoline and motor vehicle and parts dealers, rose 0.4 per cent. In volume terms, sales rose 1.3 per cent in December. 

In BC, seasonally-adjusted sales fell 1.1 per cent in December. Compared to the same month last year, retail sales were up 4 per cent in the province. In the Greater Vancouver region, sales fell 0.9 per cent month-over-month and were up 3.7 per cent year-over-year. 

In December, Canadian e-commerce sales fell 1.6 per cent to $4.4 billion, corresponding to 6.5 per cent of retail sales. This percentage remains elevated relative to pre-pandemic levels, but is lower than during core months of the pandemic in 2020 and 2021.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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Canadian Inflation (January 2023) - February 21, 2023


Canadian prices, as measured by the Consumer Price Index (CPI), rose 5.9 per cent on a year-over-year basis in January, a decrease from the 6.3 per cent rate in December. Slower appreciation in prices of cellular services and passenger vehicles contributed to slowing the overall pace of price appreciationRising interest rates contributed to an increase in mortgage interest costs, which were up 21.2 per cent year-over-year, the fastest pace since 1982, as Canadians renewed or initiated higher-rate mortgages. In contrast, the Homeowner's Replacement Cost, which tracks home prices, continued to slow, increasing 4.3 per cent year-over-year in January. Month-over-month, on a seasonally-adjusted basis, prices were up 0.3 per cent in January. In BC, consumer prices rose 6.2 per cent year-over-year, down from 6.6 per cent last month.



There continue to be encouraging signs that the bout of rapid price appreciation that began in January of last year is waning. Although gasoline prices were up from last month due to refinery closures, and food prices continue to rise quickly, unclogging supply chains are softening vehicle and durable good prices, pulling down the index. The Bank of Canada's measures of core inflation, which strip out volatile components, ticked downwards for a second month in a row. Although price appreciation may be moderating, it is still well above the Bank of Canada's 2 per cent target, and while the Bank has announced a conditional pause on further rate hikes, they could change course if inflation does not continue to cool. 



Copyright British Columbia Real Estate Association. Reprinted with permission.




 


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Canadian Housing Starts (January 2023) - February 16, 2023



Canadian housing starts declined 13.3 per cent to 215,365 units in January at a seasonally-adjusted annual rate (SAAR). Starts were down 6.9 per cent from January of 2022. Single-detached housing starts rose 9.5 per cent to 62.9k, while multi-family and others fell 20.1 per cent to 152.5k (SAAR). 

In British Columbia, starts fell by 13.6 per cent in January to 50.1k units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 11.3 per cent m/m to 5.9k units while multi-family starts fell 14.2 per cent to 40.6k units. Starts in the province were 29.1 per cent above the levels from January 2022. Starts were up by 2.4k in Victoria and 0.1k in Kelowna, while falling 5.4k in Vancouver and 1.5k in Abbotsford. The 6-month moving average trend rose 0.6 per cent to 50.7k in BC in November. 



Copyright British Columbia Real Estate Association. Reprinted with permission.


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BC Housing Market Activity Off to a Slow Start in 2023



The British Columbia Real Estate Association (BCREA) reports that a total of 3,047 residential unit sales were recorded in Multiple Listing Service® (MLS®) systems in January 2023, a decrease of 50.3 per cent from January 2022. The average MLS® residential price in BC in 2023 has seen a dip to $872,934, down 16.1% compared to the average price of over $1 million in January 2022, which was recorded near the peak of the market. The total sales dollar volume was $2.7 billion, representing a 58.3% decrease from the same time in the previous year. 


“Provincial sales are off to a slow start in 2023 as activity continues to be weighed down by high borrowing costs,” said BCREA Chief Economist Brendon Ogmundson. “While average prices have flattened out in many markets over the past few months, year-over-year measures reflect the decline that occurred from the peak in 2022, as well as a marked shift in the composition of sales away from more expensive homes.”
  

The total number of active listings has significantly increased compared to the record low level recorded at the start of 2022. However, at just under 22,000 total listings, the inventory of homes for sales remains well below normal for January as a scarcity of new listings in many markets has muted the impact of slow sales activity.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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Canadian Employment (January 2023) - February 10, 2023


Canadian employment rose to 20.03 million in January, up by 150,000 (0.5 per cent). The Canadian unemployment rate held steady at 5 per cent, hovering just above all-time lows. Employment gains were concentrated among workers aged 25 to 54; workers in Ontario, Quebec, and Alberta; and workers in wholesale and retail trade, health care and social assistance, and educational services. Average hourly wages were up 4.5 per cent from January of last year, while total hours worked were up 5.6 per cent year-over-year. 

Employment in BC rose by 7,700 (0.3 per cent) to 2.771 million in January, while Metro Vancouver's employment rose by 0.4 per cent month over month. BC's unemployment rate rose to 4.4 per cent, still near record lows, while Metro Vancouver's rate rose to 4.7 per cent. Among the provinces, only Quebec, Manitoba, and Saskatchewan currently have a lower unemployment rate. 



Copyright British Columbia Real Estate Association. Reprinted with permission.


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Quick Snapshot of METRO VANCOUVER'S January 2023 MLS Sales



The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver* is currently $1,111,400. This represents a 0.3% decrease from Dec 2022 and a 6.6% decrease from January 2022.


Specifically:


- The benchmark price for detached homes decreased 1.2% from Dec 2022 and decreased 9.1% from Jan 2022.


- The benchmark price for townhouses increased 0.8% from Dec 2022 and decreased 3.0% from Jan 2022.


- The benchmark price for apartment/condos increased 1.0% from Dec 2022 and decreased 1.1% from Jan 2022.



*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.

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Inventory remains low in Metro Vancouverwhile home sales dipped well below monthly historical averages in January:


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,022 in January 2023, a 55.3 per cent decrease from the 2,285 sales recorded in January 2022, and a 21.1 per cent decrease from the 1,295 homes sold in December 2022. Last month’s sales were 42.9 per cent below the 10-year January sales average.


“Due to seasonality, market activity is quieter in January. With mortgage rates having risen so rapidly over the last year, we anticipated sales this month would be among the lowest in recent history,” said Andrew Lis, REBGV’s director, economics and data analytics. “Looking forward, however, the Bank of Canada has said that it will pause further rate increases as long as the incoming economic data continues to support this policy stance. This should provide more certainty for home buyers and sellers in the market.”


There were 3,297 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2023. This represents a 20.9 per cent decrease compared to the 4,170 homes listed in January 2022 and a 173.4 per cent increase compared to December 2022 when 1,206 homes were listed. The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,478, a 32.1 per cent increase compared to January 2022 (5,663) and a 1.3 per cent increase compared to December 2022 (7,384).


For all property types, the sales-to-active listings ratio for January 2023 is 13.7 per cent. By property type, the ratio is 10.2 per cent for detached homes, 13.4 per cent for townhomes, and 16.7 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.


“We know the peak for prices in our market occurred last spring. Over the coming months, year-over-year data comparisons will show larger price declines than we’ve been reporting up to now,” said Lis. “It’s important to understand that year-over-year calculations are backward-looking. These price declines already happened, and what we are seeing today is that prices may have found a footing, even if it’s an awkward one sandwiched between low inventory and higher borrowing costs.”


The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,111,400. This represents a 6.6 per cent decrease over January 2022 and a 0.3 per cent decrease compared to December 2022.


Sales of detached homes in January 2023 reached 295, a 52.6 per cent decrease from the 622 detached sales recorded in January 2022. The benchmark price for a detached home is $1,801,300. This represents a 9.1 per cent decrease from January 2022 and a 1.2 per cent decrease compared to December 2022.


Sales of apartment homes reached 571 in January 2023, a 56.6 per cent decrease compared to the 1,315 sales in January 2022. The benchmark price of an apartment home is $720,700. This represents a 1.1 per cent decrease from January 2022 and a one per cent increase compared to December 2022.


Attached home sales in January 2023 totalled 156, a 55.2 per cent decrease compared to the 348 sales in January 2022. The benchmark price of an attached home is $1,020,400. This represents a three per cent decrease from January 2022 and a 0.8 per cent increase compared to December 2022.




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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The Canadian economy grew 0.1 per cent in November, matching the rate of growth in October. In contrast to the pandemic economy of the previous two years, the services sector is now leading the economy while goods producing sectors struggle.  Overall, growth was fairly broad-based with 14 of 20 Canadian industrial sectors posting positive growth. Rising interest rates continue to impact highly rate-sensitive sectors like residential construction and real estate. Residential construction activity contracted 1.8 per cent in November and output from offices of Real Estate Agents and Brokers fell 4.2 per cent, the ninth consecutive monthly decline in that sector.

With November's data and Statistics Canada's preliminary estimate of zero growth in December, the final quarter of 2022 likely saw growth of 1.6 per cent on an annualized basis. While GDP data is showing signs of a slowing economy, that slowdown has yet to show up in the labour market where job gains remain robust and the unemployment rate is at a historical low. However, we expect that as higher interest rates begin impacting the wider economy this year, slowing growth will catch up to the labour market. That outlook is shared by the bond market where long-term rates have been falling as investors price in expectations of a slowing economy. If that trend continues, we should see further relief on fixed mortgage rates this year while variable rate holders will have to wait for a pivot to lower rates from the Bank of Canada.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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