A secret agent was sent to a small town in Ireland to pick up sensitive information from an agent named Mike. His instructions were to walk around the town using a code phrase until he met his fellow agent. He found himself on a desolate country road and finally ran into a farmer.

“Hello,” said the agent. “I’m looking for a man called Mike.”

“Well you’re in luck,” said the farmer. “The butcher is called Mike, the baker is named Mike, and in fact, my name is Mike.”

“A-ha,” thought the agent, “maybe this is my man.” So he whispered the secret code:
“The sun is shining, the grass is growing, and the cows are ready for milking.” “Oh,” said the farmer, “you’re looking for Mike the spy. He lives next door."

The Canadian economy contracted by 11.5 per cent from the first to the second quarter, or 38.9 per cent on a quarterly annualized basis, the steepest quarterly decline on record going back to 1961. Consumer spending fell 13.1 per cent as the start of the COVID-19 pandemic caused record job losses and prompted stores to close.  Business investment was down 16.2 per cent and exports fell 18.4 per cent as our trading partners dealt with the fallout of COVID-19 in their own economies.

The good news in an otherwise historically bad GDP report was that positive economic growth resumed with vigor following the record decline in April. The Canadian economy grew 4.8 per cent in May and 6.5 per cent in June, the highest monthly growth on record.  We are currently tracking third quarter real GDP growth at close to 8 per cent, or more than 30 per cent on a quarterly annualized basis. While that is a sharp and welcome rebound in economic activity, there is still quite a way to go before the Canadian economy is fully recovered. In fact, we do not expect real GDP to return to its pre-COVID-19 level until 2022.  That means that the current near-zero Bank of Canada policy rate and the resulting historically low 5-year fixed mortgage rates will be around for quite some time to come.

For more information, please contact: Gino Pezzani.

BCREA 2020 Third Quarter Housing Forecast Update

Vancouver, BC – August 25, 2020. The British Columbia Real Estate Association (BCREA) released its 2020 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to rise 6.5 per cent to 82,380 units this year, after recording 77,351 residential sales in 2019. MLS® residential sales are forecast to increase 17.6 per cent to 96,860 units in 2021.

“The outlook for the BC housing market is much brighter following a surprisingly strong recovery,” said Brendon Ogmundson, BCREA Chief Economist. “We expect home sales will sustain this momentum into 2021, aided by record-low mortgage rates and a recovering economy.”

With home sales more than fully recovered and now above pre-COVID-19 levels, combined with a decline in the supply of re-sale listings driven by the pandemic, many markets are now seeing sharply rising average prices despite a weak provincial economy. We are forecasting the provincial MLS® average price to finish the year up 7.7 per cent and to increase a further 3.7 per cent in 2021.

For more information, please contact: Gino Pezzani.

Creative minds are always learning. Brain coach Jim Kwik, who has worked with millionaire entrepreneur Elon Musk, shared three of his top learning tips on the Make It website.

• Get rid of your ANTs: Automatic Negative Thoughts telling you that you can’t learn something new - you’re too old, you’re not smart enough, it’ll be too hard, and so forth. Teach yourself to talk back to your ANTs. If you catch yourself thinking, “I can’t learn that,” tell yourself, “Yes, I can learn that.” Expand your mind to fit what’s possible, Kwik says.

• Feed your brain: The food you eat can help your brain stay fit and flexible. Avocados, for example, provide monounsaturated fat, which can maintain a healthy blood flow. Blueberries can help protect your brain from oxidative stress, caused by an imbalance of free radicals and antioxidants in your body, and reduce the effects of brain aging.

• Read: Reading promotes learning. Expose yourself to different ideas by reading a wide variety of books and articles. Set a goal: just 10 minutes a day for a start, then go from there.

One day a young teacher was driving alone, wondering how he was going to afford supplies for his classroom, when he saw an elderly lady stranded on the side of the road with a flat tire.

He pulled his sputtering old truck in front of her sedan and suggested: “Why don’t you wait in the car where it’s warm while I change this tire for you? By the way, my name is Bryan Anderson.”

Bryan’s shirt was smudged with grease and his knuckles were scraped by the time he changed her flat tire, but he refused to take any payment from the lady. He asked instead that she give assistance to the next person who looked like they might need it.

After waiting to make sure she drove off safely, Bryan left as well.

The lady turned off at a small coffee shop a few miles down the road to take the chill off before she made the last leg of her trip home. There, she noticed the waitress with a sweet smile was pregnant.

She paid for her coffee with a hundred dollar bill and while the waitress went to get change, the lady slipped out the door, but wrote a note on the napkin: “No change necessary, just do something for another person who needs it.” Under the napkin were four more $100 bills.

That night when the waitress got home from work, her husband was already sleeping so she tucked the cash into his work bag with a note “For school supplies”. She climbed into bed and whispered: “I love you, Bryan” before falling asleep

Many years ago a young couple with three sons bought a house in the country. The previous owner, who spoke only French, said something that made the couple think that gold could be found on the property. They told their sons, who began digging up the ground looking for wealth.

After a few weeks much of the ground around the house had been turned over, and with no gold found, the father decided to plant some seeds: corn, tomatoes, potatoes, and onions. With his sons’ help, he grew so much that he went on to open a roadside stand to sell the extra produce for a little additional money.

The boys kept digging, turning over the soil as they went deeper and deeper, allowing the couple to plant even more crops.

This went on for several years. The vegetable stand prospered, and soon the couple had enough money to send all of their children to university.

One day the original owner came by for a visit. He’d learned English, and he asked the couple how they’d gotten started in the vegetable business. When the husband reminded him about the gold, the first owner laughed.

“I didn’t say there was gold in the soil,” he explained. “I said the soil was very rich.”

And as things turned out, it was.

It's interesting how a misunderstanding can lead to good fortune, when hard work enters the equation.

Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.1% in July year-over-year, down from a 0.7% rise in the previous month. Excluding gasoline, the CPI rose by 0.7%. Inflation grew at a slower pace than in June due to a broad-based slowdown in price growth. Prices rose in five of eight components year-over-year, while prices fell for air transportation (-8.6%) and accommodations (-27%). This is the first year-over-year price decline in the transportation component since December 2015. Meanwhile, the Bank of Canada's three measures of trend inflation fell by 0.1 percentage points, averaging 1.6% in July.

Regionally, the CPI was positive in five provinces. In BC, CPI rose by 0.2% year-over-year, following a 0.5% rise in June. Prices for food, alcohol/tobacco/cannabis, and health and personal care continued to rise in July, while downward pressure on gas prices eased up as people were using their vechicles more.

The impact of COVID-19 on some of the hard hit components are beginning to dissipate, excluding the transportation and accommodation sectors, which usually see a rise in the summer months. The path of inflation going forward will be a constant tension between various incentives such as reduced fees, discounts and promotions, against lower revenues due to physical distancing measures.

For more information, please contact: Gino Pezzani.