Steve Flynn  RE/MAX Crest Realty- Burnaby 

Cell: 604.785.3977 |


The Bank of Canada maintained its overnight rate at 5 per cent this morning. In the statement accompanying the decision, the Bank noted that there is growing evidence that higher interest rates are dampening economic activity, and it expects growth to be weak through 2024. On inflation, the Bank sees little downward momentum in its preferred measures of core inflation and expects inflation to average 3.5 per cent until the middle of next year before falling back to its 2 per cent target in 2025.  Notably, the Bank stated that it is concerned that price stability is slow and inflationary risks have increased. As such, it is prepared to still raise its policy rate further if needed. 

The combination of a slowing economy with inflation seemingly stuck in a range of 3 to 4 per cent muddies the outlook for rates over the next year, though as the Bank clearly stated, there is the possibility of more rate increases if inflation does not decline. Our bet is still that the impact of high interest rates will tip the economy at least briefly into negative territory, and that consumer spending will slow further. However, without significant progress on returning inflation to its 2 per cent target, households may be waiting longer than expected for relief on variable mortgage rates. Yields on five-year Government of Canada bonds have come down from their highs near 4.5 per cent but remain at their highest level in 15 years. Consequently, fixed mortgage rates have hit annual highs over 6 per cent, the impact of which is compounded by an increasingly punishing stress test. We expect five-year fixed mortgage rates may start to come down in early 2024 as bond markets price in future rate cuts by the Bank of Canada.  However, once the Bank lowers its policy rate back to neutral (2-3 per cent), fixed mortgage rates will settle at a level that is higher than borrowers have become accustomed to over the past decade.

Copyright British Columbia Real Estate Association. Reprinted with permission.


Canadian Inflation (September 2023) - October 17, 2023

Canadian prices, as measured by the Consumer Price Index (CPI), rose 3.8 per cent on a year-over-year basis in September, down from 4 per cent in August. Excluding gasoline, CPI rose 3.7 per cent year-over-year in September. Shelter costs were up 6 per cent year over year, the same increase as August, driven by mortgage interest costs (up 31 per cent from last year) along with rents (up 7 per cent). Grocery prices were up 5.8 per cent year over year in September, down from 6.9 per cent in August and 8.5 per cent in July. Month over month, seasonally adjusted CPI rose 0.2 per cent. In BC, consumer prices rose 3.3 per cent year-over-year.

Price appreciation took a breather last month, bucking expectations and slowing in September. While shelter inflation continued to show high price growth, food inflation has softened significantly since the start of the year, falling by nearly half from over 10 per cent in January. While still stubbornly high, the Bank of Canada's measures of core inflation, which strip out volatile components, moderated in September. Amid weakening labour markets and flat GDP growth, this unexpectedly cool inflation report offers hope that the Bank of Canada may not need to tighten as much as expected, and bond yields fell following the release. Markets now put the majority odds on the bank holding rates steady for the remainder of the year. 

Copyright British Columbia Real Estate Association. Reprinted with permission.


Canadian Housing Starts (September 2023) - October 18th, 2023

Canadian housing starts rose 8 per cent to 270,466 units in September at a seasonally adjusted annual rate (SAAR). Starts were down 9 per cent from the same month last year. Single-detached housing starts rose 2 per cent from last month to 56,880 units, while multi-family and others rose 10 per cent to 213,585 units (SAAR). 

In British Columbia, starts fell 18 per cent from last month to 40,493 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 10 per cent m/m to 5,621 units while multi-family starts fell 21 per cent to 31,409 units. Starts in the province were 25 per cent below the levels from September 2022. Starts declined by 5.3k in Vancouver and by 5.4k in Victoria while rising by 780 units in Kelowna from last month. In Abbotsford, starts were unchanged. The 6-month moving average trend in BC fell by 3.5 per cent to 51,108 SAAR.

Copyright British Columbia Real Estate Association. Reprinted with permission.


Canadian Employment (August 2023) - September 10, 2023

Canadian employment rose by 64,000 (0.3 per cent) in September. The Canadian unemployment rate remained flat at 5.5 per cent, now unchanged for three consecutive months. Average hourly wages rose 5 per cent year-over-year to $34.01 in September, while total hours worked were up 2.6 per cent from September of last year.

Employment in BC rose 0.9 per cent to 2.81 million, while employment in Metro Vancouver rose 2 per cent to 1.61 million. The unemployment rate rose to 5.4 per cent in BC, up from 5.2 per cent in August, while remaining unchanged at 5.8 per cent in Metro Vancouver.

Copyright British Columbia Real Estate Association. Reprinted with permission.


Quick Snapshot of METRO VANCOUVER'S September 2023 MLS Sales

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver* is currently $1,203,300. This represents a 0.4% decrease from August 2023 and a 4.4% increase from September 2022.


- The benchmark price for detached homes decreased 0.1% from Aug 2023 and increased 5.8% from Sep 2022.

- The benchmark price for townhouses decreased 0.5% from Aug 2023 and increased 5.3% from Sep 2022.

- The benchmark price for apartment/condos decreased 0.2% from Aug 2023 and increased 5.8% from Sep 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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