Canadian retail sales fell 0.2 per cent in November to $66.6 billion. Excluding volatile items, sales were down 0.6 per cent month-over-month. In volume terms, retail sales decreased 0.2 per cent in November. Retail e-commerce trade fell by 1.5 per cent to $3.9 billion in November, amounting to 5.8 per cent of total retail sales. 

Sales in BC rose 0.7 per cent in November. BC retail sales are up 1.4 per cent from the same time last year. In the CMA of Vancouver, retail sales were up 1.2 per cent from last month and 3.3 per cent from November of 2022.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian housing starts rose 18 per cent to 249,255 units in December at a seasonally adjusted annual rate (SAAR). Starts were down 1 per cent from the same month last year. Single-detached housing starts fell 3 per cent from last month to 52,426 units, while multi-family and others rose 25 per cent to 196,830 units (SAAR). 

In British Columbia, starts jumped 58 per cent from last month to 62,458 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 8 per cent to 4,559 units while multi-family starts leaped 71 per cent to 55,329 units. Starts in the province were 8 per cent above the levels from December 2022. Starts rose from last month by 19.5k units in Vancouver, 2.2k in Victoria, and 3.8k in Kelowna while falling by 4.5k in Abbotsford. The 6-month moving average trend in BC fell by 1 per cent to 49,785 SAAR. 

For the full year of 2023, starts in areas of Canada with 10,000 or more residents declined 7 per cent to 223,513, driven by a 25 per cent decline in single-family homes. However, starts were up 8 per cent in British Columbia and 28 per cent in Vancouver from 2022.

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The British Columbia Real Estate Association (BCREA) reports that 73,109 residential unit sales were recorded by the Multiple Listing Service^® (MLS^®) in 2023, a 9.2 per cent decline from 80,506 units sold in 2022. The annual average MLS^® residential price in BC was $971,144, a 2.6 per cent decrease from $996,943 recorded the previous year. Total sales dollar volume was $71 billion, an 11.5 per cent decline from 2022.

“The highest mortgage rates in over 15 years led to the slowest sales in a decade for BC,” said BCREA Chief Economist Brendon Ogmundson. “With mortgage rates falling to start the year and the potential for Bank of Canada rate cuts on the horizon, the outlook for 2024 appears much brighter.”
 
A total of 3,596 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in December 2023, an increase of 2.6 per cent from December 2022. The average MLS^® residential price in BC was $965,447 a 6.5 per cent increase from $906,356 recorded in December 2022. Total sales dollar volume was $3.5 billion, a 9.3 per cent increase from the same time last year.

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Canadian employment was nearly unchanged from the prior month in December at 20.313 million. The Canadian unemployment rate also held steady at 5.8 per cent. Average hourly wages rose 5.4 per cent year-over-year to $34.45 in December, while total hours worked were up 1.7 per cent from December of last year.

Employment in BC rose 0.6 per cent to 2.84 million, while employment in Metro Vancouver rose 0.6 per cent to 1.62 million. The unemployment rate rose 0.3 points in BC to 5.6 per cent while rising in Metro Vancouver at 6.2 per cent in December.

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The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver* is currently $1,168,700. This represents a 1.4% decrease from November 2023 and a 5.0% increase from December 2022.

Specifically:

- The benchmark price for detached homes decreased 0.9% from Nov 2023 and increased 7.7% from Dec 2022.

- The benchmark price for townhouses decreased 1.8% from Nov 2023 and increased 6.4% from Dec 2022.

- The benchmark price for apartment/condos decreased 1.5% from Oct 2023 and increased 5.6% from Dec 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.

Canadian real GDP was nearly unchanged for the third consecutive month in October. Manufacturing contracted 0.6 per cent in October, led by declines in durable goods. Construction activity fell by 0.1 per cent, but residential construction continued to grow strongly, rising by 1.2 per cent from the prior month. Offices of real estate agents and brokers fell for the fourth consecutive month, dropping 6.8 per cent as home resales continues to soften amid elevated borrowing costs. Preliminary estimates suggest that output in the Canadian economy rose 0.1 per cent in November.

In October, Canadian inflation-adjusted GDP extended its streak of almost exactly zero growth or contraction in economic activity. Canadian real GDP is little changed from where it was in March, despite a large increase in the national population due to immigration. The economy continues to avoid a technical recession, but with per capita real GDP declining, Canadian GDP growth remains very soft. In addition, labour markets are gradually softening across Canada, and the inflation rate has shown signs of cooling, with 3-month moving averages of core inflation well below 3 per cent. Given this data, markets now broadly anticipate that the Bank of Canada will not raise its benchmark rate further. The question is, instead, how quickly the Bank will cut rates in 2024, with the balance of probabilities on cuts beginning in the spring and accumulating by the summer and towards the end of the year. The next rate announcement is on next Wednesday, January 24th. 

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian retail sales increased 0.7 per cent in October to $66.9 billion. Excluding volatile items, sales were up 1.2 per cent month-over-month. In volume terms, retail sales increased 1.4 per cent in October. Retail e-commerce trade rose by 1.8 per cent to $3.9 billion in October, amounting to 5.9 per cent of total retail sales. 

Sales in BC rose 0.5 per cent in October. BC retail sales are up 0.7 per cent from the same time last year. In the CMA of Vancouver, retail sales were up 0.7 per cent from last month and 2.3 per cent from October of 2022.

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Canadian prices, as measured by the Consumer Price Index (CPI), rose 3.1 per cent on a year-over-year basis in November, unchanged from the rate in October. Excluding energy costs, CPI rose 3.8 per cent year-over-year in November. Shelter costs continue to be a major driver of inflation, with mortgage interest costs up 29.8 per cent and rent up 7.4 per cent. Grocery price inflation continued to moderate, but nevertheless increased 4.7 per cent year-over-year last month. Month over month, seasonally adjusted CPI rose 0.25 per cent. In BC, consumer prices rose 3.2 per cent year-over-year. The Bank of Canada's preferred measures of core inflation, which strip out volatile components, remained around 3.5 per cent year-over-year in November. 

After considerable progress in taming inflation, the rate of change in the CPI has stubbornly remained close to the 3-4 per cent range since the late spring. Alongside softening labour markets and weak GDP growth, inflation in this territory has been sufficient to keep the Bank of Canada from raising rates since the summer. Although softer gasoline prices have done some of the work to pull down the inflation rate, large increases in mortgage interest costs, which are a direct consequence of Bank tightening, have pulled inflation upwards. Indeed, inflation excluding mortgage interest costs was unchanged from last month at just 2.2 per cent. Taken together, markets expect that the Bank of Canada is unlikely to raise rates further. Rather, markets expect the Bank to cut rates substantially by the summer of 2024, but this will of course depend on the rate of economic growth and price appreciation in the first half of the year.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian housing starts fell sharply by 22 per cent to 212,624 units in November at a seasonally adjusted annual rate (SAAR). Starts were down 19 per cent from the same month last year. Single-detached housing starts fell 6 per cent from last month to 56,268 units, while multi-family and others fell 26 per cent to 156,356 units (SAAR). 

In British Columbia, starts dropped 35 per cent from last month to 39,051 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 7 per cent to 5,181 units while multi-family starts dived by 40 per cent to 31,288 units. Starts in the province were 19 per cent below the levels from November 2022. Starts fell from last month by 13.6k units in Vancouver, 3.2k in Victoria, and 4.4k in Kelowna while rising by 2.1k in Abbotsford. The 6-month moving average trend in BC fell by 0.6 per cent to 50,543 SAAR.

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The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver* is currently $1,185,100. This represents a 1.0% decrease from October 2023 and a 4.9% increase from November 2022.

Specifically:

- The benchmark price for detached homes decreased 0.9% from Oct 2023 and increased 6.8% from Nov 2022.

- The benchmark price for townhouses decreased 0.7% from Oct 2023 and increased 6.9% from Nov 2022.

- The benchmark price for apartment/condos decreased 1.0% from Oct 2023 and increased 6.2% from Nov 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.

Canadian employment ticked up by 24,900 (0.1 per cent) in November. The Canadian unemployment rate also rose to 5.8 per cent, following an increase to 5.7 per cent last month. Average hourly wages rose 4.8 per cent year-over-year to $34.28 in November, while total hours worked were up 1.3 per cent from November of last year.

Employment in BC rose 0.3 per cent to 2.82 million, while employment in Metro Vancouver fell 0.1 per cent to 1.61 million. The unemployment rate fell 0.1 points in BC to 5.3 per cent while remaining unchanged in Metro Vancouver at 5.8 per cent.

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Canadian real GDP rose 0.1 per cent from the prior month in September, following contractions in the prior three months. Manufacturing jumped 0.9 per cent in September as inventory formation pushed economic activity upwards. Construction activity rose by 1 per cent, with residential building up 3.9 per cent, the largest gain since April 2021. Offices of real estate agents and brokers fell for the third consecutive month, dropping 4.1 per cent as sales weakened into the fall. Preliminary estimates suggest that output in the Canadian economy rose 0.2 per cent in October.

GDP declined 0.3 per cent in the third quarter, erasing a 0.3 per cent gain in the second quarter. The slowdown was driven in part by weaker exports, which declined 1.3 per cent from the prior quarter, led by weaker petroleum exports. Housing investment rose 2 per cent from the prior quarter but an increase in new construction (+6.4 per cent) was offset by a contraction in ownership transfer costs representing resale activity (-4.3 per cent). Employee compensation rose 1.3 per cent and household disposable income rose 1 per cent, driving the household saving rate to 5.1 per cent in the third quarter.

Canadian GDP bucked expectations and contracted in the third quarter, declining by 1.1 per cent on an annualized basis. At the same time, Statistics Canada revised its second-quarter GDP figure considerably upward, meaning that the economy has again avoided entering a technical recession. With October's preliminary figure again positive, the Canadian economy appears weak but is so far not shrinking substantially in aggregate terms. However, with very soft GDP figures occurring amid a rising unemployment rate and some progress on inflation, markets continue to expect that the Bank of Canada is likely at the end of its tightening cycle. The next rate announcement is on next Wednesday, December 6th.

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Canadian housing starts rose 1 per cent to 274,681 units in October at a seasonally adjusted annual rate (SAAR). Starts were up 4 per cent from the same month last year. Single-detached housing starts rose 5 per cent from last month to 59,911 units, while multi-family and others rose 1 per cent to 214,768 units (SAAR). 

In British Columbia, starts jumped 50 per cent from last month to 60,174 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts were unchanged from last month at 5,588 units while multi-family starts surged 65 per cent to 51,813 units. Starts in the province were 33 per cent above the levels from October 2022. Starts increased from last month by 9k units in Vancouver, 6.2k in Victoria, 2.9k in Kelowna, and 2.2k in Abbotsford. The 6-month moving average trend in BC fell by 0.3 per cent to 50,887 SAAR.

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The British Columbia Real Estate Association (BCREA) reports that a total of 5,373 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in October 2023, an increase of 1.8 per cent from October 2022. The average MLS^® residential price in BC was $968,786 up 4.1 per cent compared to October 2022. The total sales dollar volume was $5.2 billion, representing a 6 per cent increase from the same time last year.

“Home sales have slowed as expected given high borrowing costs and a punishing stress test,” said BCREA Chief Economist Brendon Ogmundson. “However, the inventory of homes for sale remains quite low, despite a modest uptick in new listings. Consequently, markets have found balance, though at a very low level of activity.”
 
On a seasonally adjusted basis, active listings in the province have increased for the fifth consecutive month, but still remain low by historical standards and fall short of what is typically required for a sustainable market balance in the long term.
 
Year-to-date BC residential sales dollar volume was down 13.6 per cent to $63.1 billion, compared with the same period in 2022. Residential unit sales were down 105 per cent to 64,936 units, while the average MLS^® residential price was down 3.4 per cent to $971,802.

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 $1,196,500. This represents a 0.6% decrease from September 2023 and a 4.4% increase from October 2022.

Specifically:

- The benchmark price for detached homes decreased 0.8% from Sep 2023 and increased 5.8% from Oct 2022.

- The benchmark price for townhouses increased 0.2% from Sep 2023 and increased 6% from Oct 2022.

- The benchmark price for apartment/condos increased 0.2% Sep 2023 and increased 6.4% from Oct 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.