Canadian retail sales fell 0.1 per cent to $66.7 billion in February. Excluding volatile items, sales were flat on a month-over-month basis. In volume terms, adjusted for rising prices, retail sales fell 0.3 per cent in February.

After falling more than 2 per cent in January, retail sales in BC were up 1.2 per cent in February and were up 2.6 per cent from the same time last year. In the CMA of Vancouver, retail sales were down 0.2 per cent from the prior month and were up 4.2 from February 2023.

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 March, up from a 2.8% increase in February. Month-over-month, on a seasonally adjusted basis, CPI rose by 0.3 per cent in March. The slight uptick in headline CPI was largely due to rising gasoline prices. Excluding energy costs, CPI rose 2.8 per cent year-over-year in March, down from 2.9 per cent in February. Shelter costs remain the major driver of inflation with mortgage interest costs up 25.4 per cent and rent up 8.5 per cent from the same time last year in March. Excluding shelter, consumer prices rose just 1.5 per cent, year over year. In BC, consumer prices rose 2.7 per cent year-over-year, up from 2.6 per cent in February. The Bank of Canada's preferred measures of core inflation, which strip out volatile components, fell to between 2.8 and 3.1 per cent per cent year-over-year in March. 

Inflation ticked slightly higher as expected in March due to rising gasoline prices, however the big surprise in this morning's data was the continued fall in the Bank of Canada's preferred measures of core inflation. Both CPI median and CPI trim were not only down an a 12-month basis but fell to well under 2 per cent when measured on a 3-month basis and to just over 2 per cent on a 6-month basis. Not only is core inflation falling, but it has become more and more clear that inflation in Canada is almost entirely a shelter driven phenomenon. Excluding the rising costs of rents and mortgages, not only is inflation falling, its negative when measured at a 3 and 6-month horizon. If the Bank of Canada is looking for a case to lower its policy rate in June, this report provides ample evidence in support of that move.

Copyright British Columbia Real Estate Association. Reprinted with permission.

The British Columbia Real Estate Association (BCREA) reports that a total of 6,460 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in March 2024, a decline of 9.5 per cent from March 2023. The average MLS^® residential price in BC in March 2024 was up 6.5 per cent at $1.02 million, compared to an average price of $958,051 in March 2023. The total sales dollar volume was $6.6 billion, a decrease of 3.6 per cent from the same time the previous year.

"March capped off a slow start to the first quarter of 2024," said BCREA Chief Economist, Brendon Ogmundson. "Despite a steep decline in fixed mortgage rates, buyers appear to be waiting on the Bank of Canada to lower its policy rate before jumping back into the market."
 
Year-to-date, BC residential sales dollar volume was up 13 per cent to $15.8 billion, compared with the same period in 2023. Residential unit sales were up 6.4 per cent to 15,938 units, while the average MLS^® residential price was up 6.5 per cent to $995,149.  

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Canadian employment was essentially unchanged from the prior month in March, remaining at 20.401 million. The unemployment rate rose 0.3 percentage points to 6.1 per cent. Average hourly wages rose 5.1 per cent year-over-year to $34.81 last month, while total hours worked were up 0.7 per cent from March of last year.

Employment in BC rose 0.2 per cent to 2.848 million, while employment in Metro Vancouver was essentially unchanged at 1.616 million in March. The unemployment rate rose 0.3 points in BC to 5.5 per cent while rising in Metro Vancouver by 0.6 points to 5.6 per cent last month.

Copyright British Columbia Real Estate Association. Reprinted with permission.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver* is currently $1,196,800. This represents a 1.1% increase from January 2024 and a 4.5% increase from March 2023.

Specifically:

- The benchmark price for detached homes increased 1.8% from Feb 2024 and increased 7.4% from Mar 2023.

- The benchmark price for townhouses increased 1.7% from Feb 2024 and increased 5.0% from Mar 2023.

- The benchmark price for apartment/condos increased 0.9% from Feb 2024 and increased 5.7% from Mar 2023.

*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.

Canadian real GDP grew 0.6 per cent in January, following a 0.1 per cent contraction in December. The growth was driven by services-producing sectors, which rose by 0.7 per cent. The resolution of public sector strikes in Quebec led to a jump in educational and social services GDP, reversing declines in the prior two months. Residential construction activity fell by 1.5 per cent, declining for the third consecutive month following a burst of activity in the summer and fall. Offices of real estate agents and brokers increased for the second consecutive month, rising 4 per cent as higher home sales in the greater Toronto region contributed to growth. Preliminary estimates suggest that output in the Canadian economy rose 0.4 per cent in February.

As striking teachers and social workers in Quebec returned to work and buoyed economic growth, the Canadian economy began 2024 with solid GDP momentum. Growth stalled in the latter half of 2023, but the January number and the February preliminary estimate suggest that the economy is regaining some strength to start the year. Decent economic growth could also reduce pressure on the Bank of Canada to cut rates, although financial markets continue to expect a first cut to occur in June. With inflation below 3 per cent for the previous two months, the Canadian economy is now experiencing disinflation and growth, putting the Bank of Canada in a more comfortable position as it decides when and how much to cut. Markets continue to expect the Bank to hold rates at its next announcement on April 10th.

Copyright British Columbia Real Estate Association. Reprinted with permission.