Geoff Cowling

Vancouver, BC – November 30, 2016. The BCREA Commercial Leading Indicator (CLI) increased for a ninth consecutive quarter, rising 2 points in the third quarter of 2017 to 135.3. That increase represents a 1.7 per cent rise over the second quarter and a 7.3 per cent increase from one year ago.

“A booming BC economy continues to drive the CLI higher," says BCREA Economist Brendon Ogmundson. "While we expect that the almost unprecedented cycle of above-trend growth in the BC economy will end next year, the overall economic environment remains very supportive."

The underlying CLI trend, which smooths often noisy economic data, continues to push higher due to strong provincial economic and employment growth. That uptrend signals further growth in investment, leasing and other commercial real estate activity over the next two to four quarters.

BCREA 2017 Fourth Quarter Housing Forecast

Vancouver, BC – November 28, 2017. The British Columbia Real Estate Association (BCREA) released its 2017 Fourth Quarter Housing Forecast today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 10.4 per cent to 91,700 units in 2018, after an expected 8.8 per cent decrease this year. A record 112,209 unit sales were recorded in 2016. The ten-year average for MLS® residential sales in BC is 84,700 units. Strong economic and demographic fundamentals are supporting elevated housing demand. However, a number of factors are expected to temper home sales in the province next year.

“Housing demand across the province will face increasing headwinds in 2018," said Cameron Muir, BCREA Chief Economist."A rising interest rate environment combined with more stringent mortgage stress tests will reduce household purchasing power and erode housing affordability." The 5-year qualifying rate is forecast to rise 20 basis points to 5.15 per cent by Q4 2018, and the new qualification rules for conventional mortgages will erode purchasing power by up to 20 per cent. "Given the rapid rise in home prices over the past few years, the effect of these factors will likely be magnified."

The supply of homes for sale is now trending at or near decade lows in most BC regions. The imbalance between supply and demand has been largely responsible for rapidly rising home prices. The combination of weakening consumer demand and a surge in new home completions next year is expected to induce more balanced market conditions, producing less upward pressure on home prices. The average MLS® residential price in the province is forecast to increase 3.1 per cent to $712,300 this year, and a further 4.6 per cent to $745,300 in 2018.

Canadian retail sales edged up 0.1 per cent on a monthly basis in September and were 6.2 per cent higher year-over-year. However, excluding the impact of higher sales of gasoline, retail trade actually declined 0.2 per cent in September and were down 0.6 per cent in inflation-adjusted terms. Given today's data release, we are tracking Q3 Canadian economic growth at 1.7 per cent, a significant deceleration from over 4 per cent growth in the second quarter.

In BC, retail sales were up once again, rising 0.4 per cent on a monthly basis and 9.8 per cent compared to September last year. Year-to-date, retail sales in the province have grown more than 9 per cent, reflecting strong job and economic growth in the province.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian manufacturing sales rose for a second consecutive month, increasing 0.5 per cent in September.  Sales were up in 7 of 21 manufacturing sub-sectors, with the majority of growth arising due to higher sales in the energy sector.
 
In BC, manufacturing sales increased 0.4 per cent on a monthly basis and were up 7.2 per cent year-over-year. Although the manufacturing and trade sector faced significant headwinds in recent months due to a stronger Canadian dollar and punitive tariffs on softwood lumber, the sector continues to be a substantial driver of BC's robust economic growth in 2017. 

Copyright British Columbia Real Estate Association. Reprinted with permission.

Vancouver, BC – November 14, 2017. The British Columbia Real Estate Association (BCREA) reports that a total of 8,677 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in October, an increase of 19.3 per cent from the same period last year. Total sales dollar volume was $6.25 billion, up 41.6 per cent from October 2016. The average MLS® residential price in the province was $720,129, up 18.7 per cent from October 2016.

“BC home sales trended higher in October, up 23 per cent from January on a seasonally adjusted basis," said Cameron Muir, BCREA Chief Economist."A lack of supply in the resale market continues to put upward pressure on home prices in most BC regions."

Total active listings were down 5.1 per cent to 27,987 units in October compared to the same month last year, and have declined 49 per cent over the last five years. The ratio of home sales to active listings was up from 24.7 per cent in October 2016 to 31 per cent last month. The BC housing market is considered to be in relative balance when the ratio of home sales to active listings is between 12 and 20 per cent.

Year to date, BC residential sales dollar volume was down 9.4 per cent to $63.8 billion, when compared with the same period in 2016. Residential unit sales declined 10.7 per cent to 90,290 units, while the average MLS® residential price increased 1.4 per cent to $706,881.

Canadian housing starts increased 2 per cent in September to 222,771 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts also increased to 216,770  units SAAR.

New home construction in BC jumped 44 per cent on a monthly basis to 53,751 units SAAR  and more than doubled on  a year-over-year basis.  Single detached starts were down 6 per cent from one year ago while multiple unit starts nearly tripled year-over-year.

Looking at census metropolitan areas (CMA) in BC: 

• Total starts in the Vancouver CMA reached a 12-month high in October, rising 92 per cent from September and 186 per cent compared to September 2016. A surge in multiple unit starts to 2,532 units in October accounted for the large increase in new home construction with large condominium projects getting underway in Burnaby, Coquitlam and Surrey.
• In the Victoria CMA market, housing starts continue to record significant gains, rising 267 per cent year-over-year. Multiple unit starts continue to drive new home construction, with starts more than 5 times the levels seen in October 2016.

• New home construction in the Kelowna CMA was down 16 per cent year-over-year and down 61 per cent from a strong September of new home construction.

• Housing starts in the Abbotsford-Mission CMA also fell in October, with both single and multiple units starts down more than 30 per cent year-over-year.

Copyright British Columbia Real Estate Association. Reprinted with permission.

Canadian employment increased by 35,000 jobs in October while the the national unemployment rate increased 0.1 points to 6.3 per cent. In the twelve months to August, employment in Canada is up 1.7 per cent, or 308,000 jobs.

In BC, employment declined for a fourth consecutive month, falling by 6,100 jobs in October. Full-time employment continued to rise, with firms adding 11,000 full-time positions, but total employment was dragged lower by a 17,200 drop in part-time work.   Over the past twelve months, the level of employment in BC is up 2.7 per cent. The provincial unemployment rate held steady in October at 4.9 per cent.

Copyright British Columbia Real Estate Association. Reprinted with permission.