Canadian Building Permits – September, 2018

The total value of Canadian building permits edged 0.1 per cent lower on a monthly basis in July. The decline was the result of lower construction intentions in BC.

In BC, the total value of permits fell 11 per cent on a monthly basis to $1.4 billion.  Residential permits decreased 15.4 per cent from June and were down 3 per cent year-over-year, as a result of lower permit activity for multi-family units in Vancouver. Non-residential permits were up 6.7 per cent from June, but were 2 per cent lower year-over-year.

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

  • Permits in the Abbotsford-Mission CMA fell 10 per cent on a monthly basis to $28.3 million. Year-over-year, permit values were down 28 per cent.
  • In the Victoria CMA, total construction intentions were down by half on a monthly basis to just $76.7 million, a 40 per cent decline over this time last year.
  • In the Kelowna CMA, permits values increased by 13.3 per cent on a monthly basis to $113.2 million, and were up 44 per cent year-over-year.
  • The Vancouver CMA recorded permit activity valued at 796.8 million, a 13.5 per cent decline from May and down 9 per cent year-over-year.

For more information, please contact:  Gino Pezzani.

Bank of Canada Interest Rate Announcement – September, 2018

The Bank of Canada maintained its target for the overnight rate at 1.50 per cent this morning. In the statement accompanying the decision, the Bank noted that the Canadian economy is evolving in line with its projections and that real GDP growth is expected to slow in the third quarter due to fluctuations in energy production and exports. Inflation is anticipated to come down from the 7-year high of 3 per cent rate observed in July, falling back to 2 per cent in early 2019. The Bank further noted that housing markets are beginning to stabilize following the implementation of the mortgage stress test. Overall, the Bank’s assessment is that higher interest rates will be warranted to achieve the 2 per cent inflation target, but policymakers are closely monitoring NAFTA negotiations and their impact on the inflation outlook.

With the threat of significant trade disruption looming from NAFTA negotiations, the Bank chose to pause its rate tightening cycle. However, strong economic growth over the past year has pushed the Canadian economy beyond its full-employment level, creating upward pressure on inflation. Rising inflation and an economy operating at capacity means that the Bank of Canada will continue on its rate tightening path, likely at it next meeting in October with an ultimate goal of the overnight rate returning to between 3 and 3.5 per cent over the next two years.

For more information, please contact:  Gino Pezzani.

Canadian Real GDP (Q2’2018) – August, 2018

Growth in the Canadian economy rebounded in the second quarter of 2018, with output expanding 2.9 per cent following just 1.4 per cent growth in the first quarter. Rising exports, an increase in household spending and a renovation spending driven rebound in housing investment were all major contributors to growth in the second quarter.

Very strong economic growth over the past year has pushed the Canadian economy beyond its full-employment level, creating upward pressure on inflation. Consumer prices rose at a 3 per cent rate in July, the first time inflation has reached that level since 2011. Rising inflation and an economy operating beyond its capacity means that he Bank of Canada will continue on its rate tightening path. The next rate hike could come as early as September though more likely in October once current NAFTA negotiations have concluded.

For more information, please contact: Gino Pezzani.

Commercial Leading Indicator Bounces Back in Second Quarter

Vancouver, BC – August, 2018. The BCREA Commercial Leading Indicator (CLI) recovered in the second quarter following a rare first quarter decline. The index rose 1.9 points to an index level of 135.4. That increase represents a 1.4 per cent rise from the first quarter of 2018. The index is 2.7 per cent higher than this time one year ago.

“The CLI was propelled higher by strong manufacturing sales and employment growth,” says BCREA Deputy Chief Economist Brendon Ogmundson. “This suggests strong performance in the industrial sector through the balance of the year.”

The trend in the CLI has flattened somewhat over the past six months, which signals continued positive, if somewhat slower, growth in commercial real estate activity.

For more information, please contact:  Gino Pezzani.

Good Luck, Bad Luck?

There is a story of a farmer whose wild stallion ran off one day.

His neighbors gathered around to commiserate with him, all muttering, “This is very bad luck.”

The farmer overheard them and shrugged, then said, “Bad luck, good luck, who knows?”

A few days later the stallion returned with a herd of wild mares. The neighbors congratulated him, saying “This is very good luck!”

“Bad luck, good luck, who knows,” said the farmer, again shrugging.

A week later the farmer’s son was trying to train one of the new mares and was thrown from the horse and broke his leg.

The neighbors gathered again, shook their heads and said, “This is very bad luck.”“Bad luck, good luck, who knows,” said the farmer.Several weeks later, a few soldiers passed through the town looking for able-bodied youth to conscript into the army. When the soldiers came to the farmer’s house and saw the boy’s broken leg, they left him alone and moved on.The neighbors gathered around, saying “That was very good luck!”“Bad luck, good luck, who knows?” shrugged the farmer once again.

The moral of the story: All luck – good and bad – is fleeting, so don’t get hung up on it!

Are You A Leader?

A junior in high school was filling out an application for her first choice school – a small, private and prestigious college – when she came across a unique question: Are you a leader?

She considered the question carefully and then decided to be radically honest. Her answer was “No.” She was afraid that because of that answer, the college would reject her application. After a few weeks, she received unusually rapid feedback in the form of a letter from the school that read:

“Dear Candidate,

We would like to inform you that this year we have already reviewed more than 800 applications. So far, there will be some 432 new leaders attending our program next year. We are happy to inform you that we have accepted your application because we feel it is important that these new leaders have at least one follower.”

The best student is often someone who admits they still have a lot left to learn.

The Year to Live

How would you spend your days if you knew you had only one more year to live? What changes would you make? Who would you forgive? What would you give up and what would you embrace? These aren’t easy questions to answer “off the cuff.” But psychologists say that putting a time limit on life, even if it’s just a mental exercise, can help us gain focus on what matters most. For that reason, it’s useful to spend some quality alone time, perhaps writing, painting, or just thinking about what you could do differently with a time limit on your life.

Or, you could do more than imagine. You could be like Stephen Levine, who decided to test the theory in his own life.

After years spent teaching meditation to terminally ill patients, Levine began to ponder the changes one might make in their lives if they knew their time was coming to an end. To test out his theory, he decided to spend a year of his life as if it were his last. He called it “The Year to Live.”

Levine soon realized there was no time to waste on regrets and bitterness. Every minute counted. This experiment helped him to let go of old resentments and forgive past wrongs. His view of the world became more compassionate, and he began to experience a heightened sense of gratitude and appreciation for the people and experiences he encountered.

During that year, Levine reports that he lived a more positive and meaningful life, with measureable differences in how he related to people and how much he got accomplished.

Fortunately, you can use your imagination to spend time reflecting, rather than doing a live experiment. You’ll still experience some of the same focusing power, which is a nice way to explore the meaning of your life.


Left On The Bus

A man was seated on the bus having an aggressive conversation with someone on his phone. He fumed and swore loudly, shouting and making demands. The other passengers were afraid to look at him, and several mothers tried to distract their children.

The bus was about to pass through an intersection when the man shouted, “I need to get off here!” The driver pulled over quickly, and the man walked forward and jumped down the stairs. Just as he stepped off the bus, the driver called out to him.

“Excuse me sir,” the driver said, “you left something behind.”

The man looked confused, as he checked his pockets. He then shouted at the driver, “What are you talking about? What did I leave?”

“A bad impression,” the driver replied as he closed the door and drove away.


Housing Market Reacts to Mortgage Stress Test

BCREA 2018 Third Quarter Housing Forecast Update

Vancouver, BC – August, 2018. The British Columbia Real Estate Association (BCREA) released its 2018 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 21 per cent to 82,000 units this year, after recording 103,768 residential sales in 2017. MLS® residential sales are forecast to increase 8 per cent to 88,700 units in 2019. The 10-year average for MLS® residential sales in the province is 84,800 units.

“The BC housing market is grappling with a sharp decline in affordability caused by tough B20 stress test rules for conventional mortgages,” said Cameron Muir, BCREA Chief Economist. “While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in BC’s large urban centres because of already strained housing affordability.”

In spite of the policy-driven downturn in housing demand, strong fundamentals continue to underpin the market. Demographics are highly favourable, especially the millennial generation who are now entering their household-forming years. In addition, low unemployment is leading to significant upward pressure on wages and, by extension, household wealth and confidence.

The pullback in BC home sales is helping alleviate a chronic shortage of supply. After trending at decade lows, active listings in the province were up nearly 20 per cent in July. The combination of slower housing demand and an increase in the inventory of homes for sale has trended most markets toward balanced conditions. This means more selection for home buyers, fewer multiple offer situations and less upward pressure on home prices.

For more information, please contact: Gino Pezzani.


Sharpen Your Powers Of Persuasion

You need other people’s help if you want to succeed. Try these two tips to get them on your side:

• Give to get what you want. It’s the code of reciprocity—people are more likely to go along with your ideas if you give them something first. For example, leaders at the Disabled American Veterans discovered that when they mailed fund-raising letters without a perk, about 18% of their appeals were successful. When they included free personalized address labels, they had a success rate of 35%.

• Call people to nobler conduct. If you are seeking agreement on an issue, allow people to contribute. For example, a Chicago restaurant cut its reservation no- show rate from 30% to 10% by asking people to call if their plans changed, rather than telling them to call. In pausing after the question, “Will you please call if you have to change your plans?”, restaurant staff found customers more willing to commit to an answer.