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Balanced Conditions Prevail in BC Housing Market

The British Columbia Real Estate Association (BCREA) reports that a total of 6,405 residential unit sales were recorded by the Multiple Listing Service® (MLS®) across the province in October, down 26.2 per cent from the same month last year. The average MLS® residential price in BC was $690,161, a decline of 4.1 per cent from October 2017. Total sales dollar volume was $4.2 billion, a 29.3 per cent decline from October 2017.

“The BC housing market continued to grapple with tougher mortgage qualifications in October,” said Cameron Muir, BCREA Chief Economist. “However, more moderate consumer demand has led to a much-needed increase in the supply of homes for sale.”

Total active residential listings were up nearly 30 per cent to 36,195 units in October, compared to the same month last year. While the BC housing market exhibited balanced conditions overall in October, market conditions do vary between regions and by product type.

Year-to-date, BC residential sales dollar volume was down 22.1 per cent to $49.7 billion, compared with the same period in 2017. Residential unit sales decreased 22.8 per cent to 69,664 units, while the average MLS® residential price was up 1 per cent to $713,662.

Source – BCREA

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Canadian Building Permits – November 6, 2018

Building Permits & Starts

The total value of Canadian building permits rose 0.4 on a monthly basis in September to $8.1 billion, driven primarily by record high construction intentions in Quebec.

In BC, the total value of permits fell 20 per cent in September from a record high of $1.8 billion in August. Residential permits fell 17 per cent on a monthly basis and were 5.6 per cent lower year-over-year. Non-residential permits were down close to 25 per cent on a monthly basis but were up nearly 20 per cent year-over-year. Total permits in BC were up 8 per cent for the third quarter, though residential permits were off 5.3 per cent due to lower construction intentions for single-family dwellings.

Construction intentions in September were mostly lower in BC’s four census metropolitan areas (CMA):

Permits in the Abbotsford-Mission CMA declined 20 per cent on a monthly basis to $25.1 million. Year-over-year, permit values were down 31.7 per cent.
In the Victoria CMA, total construction intentions nearly doubled on a monthly basis to $134.5 million, a 24 per cent increase year-over-year.

In the Kelowna CMA, permits values decreased by 11.1 per cent from August to $84.7 million, but were nearly 50 per cent higher compared to September 2017.
In the Vancouver CMA, the value of permits fell 38 per cent after a spike in permit values in August. On a year-over-year basis, the value of permits was 8 per cent lower.

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Canadian Building Permits – August 8, 2018

Canadian Construction Starts - Vancouver BC

The total value of Canadian building permits declined 2.3 per cent on a monthly basis in June. The decline was the result of lower construction intentions for residential buildings after a strong May.

In BC, the total value of permits fell 1.8 per cent on a monthly basis with non-residential permits posting a 7.8 per cent decline while residential permits were essentially flat. Year-over-year, total permit values were up 6.6 per cent to $1.45 billion as residential permits rose nearly 14 per cent to $1.1 billion.

Construction intentions in June were down in three of BC’s four census metropolitan areas (CMA):

Permits in the Abbotsford-Mission CMA fell 27 per cent on a monthly basis to $31.9 million. Year-over-year, permit values were down 26 per cent.

In the Victoria CMA, total construction intentions were up 9.2 per cent to $160.4 million, a nearly 30 per cent rise over this time last year.

In the Kelowna CMA, permits fell 12.3 per cent on a monthly basis, but were up 20.5 per cent year-over-year to $95.5 million.

The Vancouver CMA recorded permit activity valued at $832.6 million, a 2.6 per cent decline from May and roughly flat year-over-year.

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Slower Growth Expected for Economy and Housing Market  

Vancouver Real Estate Sales Forecasts

BCREA 2018 Second Quarter Housing Forecast Update

Vancouver, BC – May 31, 2018. The British Columbia Real Estate Association (BCREA) released its 2018 Second Quarter Housing Forecast today.MLS Residential Sales Forecast

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 9 per cent to 94,200 units this year, after posting 103,700 unit sales in 2017. MLS® residential sales are forecast to remain relatively unchanged in 2019, albeit down 0.2 per cent to 94,000 units. Housing demand is expected to remain above the 10-year average of 84,800 units into 2020.

“The housing market continues to be supported by a strong economy,” said Cameron Muir, BCREA Chief Economist. “However, slower economic growth is expected over the next two years as the economy is nearing full employment and consumers have stepped back from their 2017 spending spree.”

“Demographics will play a key role in the housing market over the next few years,” added Muir, “as growth in the adult-aged population is bolstered by immigration and the massive millennial generation enters its household forming years.”

Muir notes there are, however, significant headwinds in the housing market. “Rising mortgage interest rates will further erode affordability and purchasing power, with the effect being exacerbated by an already high price level. The legacy of tougher mortgage qualifications for conventional mortgagors will be a reduction of their purchasing power by up to 20 per cent, and the provincial government’s expansion of the foreign buyer tax and several other policies aimed at taxing wealth is sending a negative signal to the market and likely diverting investment elsewhere.”

The combination of slowing housing demand and rising new home completions is expected to trend most BC markets toward balanced conditions this year, and lead to less upward pressure on home prices.

Source – BCREA

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BC Home Sales Show Little Change in April – BCREA

April 2018 in Vancouver BC

The British Columbia Real Estate Association (BCREA) reports that a total of 8,203 residential unit sales were MLS Sales Data - BCREA April 2018recorded by the Multiple Listing Service® (MLS®) across the province in April, a 16.8 per cent decrease from the same month last year. The average MLS® residential price in BC was $730,507, up 0.2 per cent from the previous year. Total sales dollar volume was $5.99 billion, a 16.7 per cent decline from April 2017.

“BC home sales were essentially unchanged in April compared to March, albeit up nearly 1 per cent on a seasonally adjusted basis,” said Cameron Muir, BCREA’s Chief Economist. “The impact of more burdensome mortgage qualifications for conventional borrowers is expected to soften over the next several months as potential buyers adjust both their finances and expectations.”

The supply of homes for sale in April increased 4 per cent from the previous month. However, total active listings on the market continue to remain low from a historical perspective. Most regions of the province have begun trending toward more balance between supply and demand, causing less upward pressure on home prices.

Year-to-date, BC residential sales dollar volume was down 6.7 per cent to $19.9 billion, compared with the same period in 2017. Residential unit sales decreased 11.8 per cent to 27,135 units, while the average MLS® residential price was up 5.7 per cent to $731,661.

Source – BCREA

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Canadian Building Permits – May 9, 2018

Construction Building Starts

The total value of Canadian building permits increased 3.1 cent on a monthly basis in March, led by higher construction intentions of multi-family units in Quebec and BC. Year-over-year, the value of permits was up 10.8 per cent.

The total value of permits issued in BC jumped 22 per cent on a monthly basis and was 74.2 per cent higher year-over-year at $1.77 billion. Non-residential permits were up 16.7 per cent on a monthly basis and 94 per cent year-over-year to nearly $1.3 billion. Residential permits increased 16.7 per cent monthly basis and were 67.2 per cent higher year-over-year.

Construction intentions in December were higher in only three of BC’s four census metropolitan areas (CMA):

Permits in the Abbotsford-Mission CMA declined 17 per cent on a monthly basis to $35.6million. Year-over-year, permit values were up 25.7 per cent.

In the Victoria CMA, total construction intentions declined 15.8 per cent to $93.7, a 1.1 per cent dip year-over-year.

In the Kelowna CMA, permits were up 54.1 per cent monthly basis, but down 21.5 per cent year-over-year to $83.3 million.

The Vancouver CMA recorded permit activity valued at $1.160 billion, an increase of 27.8 per cent over February and up 114.4 per cent year-over-year.

Source – BCREA

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Canadian Housing Starts – May 8, 2018

Construction in BC Vancouver Real Estate April 2018

Canadian housing starts fell 5 per cent on a monthly basis in April to 214,379 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts was steady at about 226,000 units SAAR.

In BC, total housing starts declined 17 per cent on a monthly basis to 38,750 units SAAR and were down 11 per cent year-over-year. Multiple unit starts were down 10 per cent year-over year and 21 per cent month-over-month while single detached starts were down 11 per cent year-over-year and were flat compared to March.

Looking at census metropolitan areas (CMA) in BC: 

  • Total starts in the Vancouver CMA were down 28 per cent monthly basis to 23,366 units SAAR. Year-over-year, Vancouver starts were down 21 per cent.

  • In the Victoria CMA, housing starts were down 8 per cent on a monthly basis. Although single detached starts were nearly double the previous month, a 26 per cent decline in multiple unit starts resulted in an overall decline in new home construction. Year-over-year, total starts were up 26 per cent.

  • In the Kelowna CMA, new home construction doubled on a monthly basis due to a surge in multiple unit starts.  However, total starts were down 5 per cent compared to April 2017.
  • Housing starts in the Abbotsford-Mission CMA  fell 66 per cent compared to March due to large declines in both single detached and multiple unit starts. Year-over-year, total housing starts were also down 66 per cent.

Source – BCREA

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Canadian Inflation and Retail Sales

Canadian Retail Sales & Inflation

Canadian retail sales increased 0.4 per cent on monthly in basis in February and were 3.5 per cent higher year-over-year. Sales were higher in only 4 of 11 sub-sectors representing less than half of total retail trade. With today’s data, and all other data available thus far for the first quarter, we are tracking Canadian economic growth at about 1.6 per cent for the first quarter of 2018. In BC, retail sales were up 0.4 per cent on a monthly basis and 5.9 per cent year-over-year. Retail sales in the province continue to moderate back to historical trend after growing close to 10 per cent in 2017.

Canadian inflation, as measured by the Consumer Price Index (CPI), increased again in March as prices rose 2.3 per cent year-over-year, up from 2.2 per cent in February. The Bank of Canada’s three measures of trend inflation were relatively unchanged at around 2 per cent. In BC, provincial consumer price inflation was 2.6 per cent in the 12 months to March. Rising inflation and an economy operating at capacity signals further Bank of Canada tightening, potentially as soon as the next interest rate decision on May 30.

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Canadian Housing Starts – April 2018

Canadian Housing Starts - April 2018

 

Canadian housing starts fell 3 per cent on a monthly basis in march to 225,213 units at a seasonally adjusted annual rate (SAAR). The six-month trend in Canadian housing starts was steady at about 226,000 units SAAR.

In BC, total housing starts jumped 48 per cent on a monthly basis to 46,629 units SAAR with multiple unit starts rising over 60 per cent. On a year-over-year basis, total starts in the province were 4 per cent higher.

Looking at census metropolitan areas (CMA) in BC:

Total starts in the Vancouver CMA were up 60 per cent on a monthly basis after falling close to 40 per cent in February. Year-over-year, Vancouver starts were up 6 per cent. The 32,000 unit annual pace set in March was the result of an increase in both condo and rental units in core parts of the Metro area including the City of Vancouver, Richmond and North Vancouver.

In the Victoria CMA, housing starts were down 5 per cent on a monthly basis but were almost double the level of March 2017 due to a surge of new multi-unit starts. Apartment starts were 77 per cent higher than March last year while single detached starts were down 32 per cent.

In the Kelowna CMA, new home construction bounced back from a slow February with total housing starting rising by over 4 times the previous months activity. However, starts were down 68 per cent compared to what was a very busy March of 2017.
Housing starts in the Abbotsford-Mission CMA increased 71 per cent on a monthly basis but were down 20 per cent year-over-year, largely due to lower single detached starts. Multiple unit starts were essentially flat compared to last year.

Source – BCREA

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Canadian Retail Sales and Inflation

Canadian Retail Sales - March 2018

Canadian retail sales increased 0.3 per cent on monthly in basis in January and were 3.6 per cent higher compared to last January. Sales were higher in 7 of 11 sub-sectors representing 63 per cent of total retail trade.  With today’s data, and all other data available thus far for the first quarter, we are tracking Canadian economic growth at just 0.9 per cent for the first quarter of 2018.  In BC, after growing nearly 10 per cent in 2017,retail sales growth has slowed, falling 1 per cent on a monthly basis in January but rising 6.2 per cent compared to January 2017.

Canadian inflation, as measured by the Consumer Price Index (CPI), jumped higher in February, registering 2.2 per cent year-over-year, up from 1.7 per cent in January. The Bank of Canada’s three measures of trend inflation were all higher as well and now are either very close to or exceeding the Bank’s 2 per cent inflation target.   In BC, provincial consumer price inflation was 2.8 per cent in the 12 months to February.

Today’s data is somewhat mixed in its impact on monetary policy in Canada. On the one hand, the Canadian economy appears to be slowing considerably, while on the other, inflation continues to close in on the Bank’s target of 2 per cent.  We believe the Bank will continue to hold interest rates steady until summer or fall to get a better grasp on the direction of the economy before acting.

Source – BCREA