Canadian retail sales rose 0.9 per cent in December to $67.3 billion. Excluding volatile items, sales were up 0.5 per cent month-over-month. In volume terms, retail sales rose 0.8 per cent in December. Retail e-commerce trade fell by 3.6 per cent to $3.7 billion in December, amounting to 5.5 per cent of total retail sales. 

Sales in BC rose 1.5 per cent in December. BC retail sales are up 2.8 per cent from the same time last year. In the CMA of Vancouver, retail sales were up 1.5 per cent from last month and 5.4 per cent from December of 2022.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 2.9 per cent on a year-over-year basis in January, down from a 3.4% increase in December. Month-over-month, on a seasonally adjusted basis, CPI declined by 0.1 per cent in January, the first decline since May of 2020. Gasoline base-year effects contributed to the decline. Excluding energy costs, CPI rose 3.3 per cent year-over-year in January, down from 3.7 per cent in December. Decelerating food costs also contributed to the slowing in the CPI, with food prices rising by 3.4 per cent in January compared to 4.7 per cent in December. Shelter costs, however, continue to be a major driver of inflation, with mortgage interest costs up 27.4 per cent and rent up 7.9 per cent from last year in January. Excluding shelter, consumer prices rose 1.5 per cent, year over year. In BC, consumer prices rose 3 per cent year-over-year. The Bank of Canada's preferred measures of core inflation, which strip out volatile components, fell to between 3.3 and 3.4 per cent per cent year-over-year in January. 

January's CPI report contained unexpectedly good news, with the annual change in prices technically falling within the Bank of Canada's 1 to 3 per cent target range and declining month-over-month on a seasonally adjusted basis for the first time since the start of the pandemic. While volatile gas prices contributed to the decline, easing price pressures in other areas also reduced pressure on the CPI. Food price appreciation has been easing over the past 12 months and is now not far above historical norms. The category that remains the most challenging is shelter, with rents in particular so far showing no sign of slowing. Overall, January was an encouraging report, and markets shifted their expectations of rate cuts forward slightly, with cuts expected to begin in Q2. However, the Bank of Canada will be looking to see a sustained trend in inflation in the coming months before they will be comfortable initiating rate cuts.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian housing starts fell 10 per cent to 223,589 units in January at a seasonally adjusted annual rate (SAAR). Starts were up 7 per cent from the same month last year. Single-detached housing starts rose 4 per cent from last month to 54,248 units, while multi-family and others fell 14 per cent to 169,341 units (SAAR).

In British Columbia, starts fell 50 per cent from last month to 31,088 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts rose 3 per cent to 4,742 units while multi-family starts shrank 56 per cent to 24,206 units. Starts in the province were 39 per cent below the levels from January 2023. Starts fell from last month by 22.3k units in Vancouver, 5.5k in Victoria, and 2.8k in Kelowna while rising by 1.0k in Abbotsford. The 6-month moving average trend in BC fell by 5.8 per cent from last month to 46,902 SAAR.

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The British Columbia Real Estate Association (BCREA) reports that a total of 3,979 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in January 2024, an increase of 29.4 per cent from January 2023. The average MLS^® residential price in BC in January 2024 was up 10.5 per cent at $957,909 compared to an average price of $866,922, the low-point for average prices over the past two years. The total sales dollar volume was $3.8 billion, an increase of 42.9 per cent from the same time in the previous year.

"Home sales are on a clear uptrend to start 2024," said BCREA Chief Economist Brendon Ogmundson. "A sharp decline in fixed mortgage rates and expectations for future Bank of Canada rate cuts is driving sentiment in the market and bringing pent-up demand off the sidelines."
 
The total number of active listings, though up year-over-year, remains relatively low by historical standards. New listings activity has shown signs of normalizing following a down year in 2023. A steady pace of new inventory will be crucial in keeping markets balanced as sales accelerate.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian employment rose by 0.2 per cent in January to 20.362 million. The unemployment rate fell 0.1 percentage points to 5.7 per cent. Average hourly wages rose 5.3 per cent year-over-year to $34.75 last month, while total hours worked were up 1.1 per cent from January of last year.

Employment in BC fell 0.1 per cent to 2.84 million, while employment in Metro Vancouver fell 0.4 per cent to 1.61 million in January. The unemployment rate fell 0.1 points in BC to 5.4 per cent while falling in Metro Vancouver at 5.5 per cent.

Copyright British Columbia Real Estate Association. Reprinted with permission.