Summary Findings:

• • Growth in home prices is a function of many factors and those factors do not always impact prices to the same degree
  • Shocks to housing demand and interest rates are the largest contributors to fluctuations in home prices, but provincial and municipal governments have limited to no ability to control these factors
  • Policies to increase the overall housing stock and grow the supply of residential listings would be enormously beneficial to controlling future price growth

For more information, please contact: Gino Pezzani.

Here is to view the Market Intelligence Report PDF:

[gview file="https://vanhomesales.com/wordpress/wp-content/uploads/2021/03/Supply-and-Demand-A-Quantitative-History-of-BC-Home-Prices.pdf"]

Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 1.1% in February year-over-year. The increase was again due to higher gasoline prices (5%). Excluding the volatile gasoline component, the CPI rose by 1%, which is down from 1.3% in January. Prices rose in all components of the CPI except for clothing and footwear. Growth in the Bank of Canada's three measures of trend inflation remained unchanged, averaging 1.7%.

Regionally, the CPI was positive in all provinces, led by Quebec (1.6%). In BC, CPI rose by 0.9% in February year-over-year, down from January's 1.1%. Strong price growth continued for health and personal care, shelter, and food. Transportation costs reported the first notable increase since the pandemic started.

Gas prices were again the driving force behind inflation growth in February. It will continue to do so for the foreseeable future, as oil producers tighten supply. Despite this, the Bank of Canada has indicated that it will not raise rates until the economy is back at full employment and inflation is sustained at its 2% target rate.

For more information, please contact: Gino Pezzani.

The link: https://mailchi.mp/bcrea/canadian-inflation-feb-march-17-2021

Does your organization know how to learn? In a world dominated by the ability to process information, the ability to learn, as an organization, is crucial. Here are five ways you can create a learning organization:

1. Encourage self-directed learning for employees. Instead of telling people what to learn, give permission for them to explore what they think is important. And provide resources like access to information, the Internet, time off, and tuition reimbursement, if possible.

2. Promote cross-pollination of ideas. Bring together team members from different departments to share ideas and strategies. Encourage people to respect different opinions and points of view so meetings produce thoughtful, innovative results.

3. Use open-ended language. In your meetings and discussions, ask questions that stimulate creative thought and learning without simply focusing on finding “correct” answers. If you can say, “Let’s explore that further,” you’ll show everyone on your team that you consider striving for improvement more important than a single “right” answer.

4. Treat mistakes as learning opportunities. Hold honest, straightforward conversations when something doesn’t work as anticipated. Look for lessons that might improve the process next time, as well as ideas for new processes that might result in an innovative product.

5. Review the learning process. On a regular basis, ask team members what’s working and what isn’t. With this information, get to work on fixing what doesn’t work and enhancing what’s going well.

Canadian employment gained 259k jobs in February (1.4%, m/m), almost making up for the 266k jobs lost in the previous two months. This left the employment level 3.1% (-599k) below its February 2020 pre-pandemic level. The rise was largely in part-time employment with full-time positions continuing to see positive growth in February. Notable job gains were reported in Quebec (113k) and Ontario (100k), as both provinces began easing restrictions in February. The only province to report negative job growth was Newfoundland and Labrador. The national unemployment rate decreased by 1.2 percentage points to 8.2%, which is the lowest rate since March 2020.

In BC, employment grew by 27k (1.0%, m/m) in February, following a gain of 3k in January. The unemployment rate decreased from 8% to 6.9%, which is the lowest rate the province has recorded since February 2020. Meanwhile, in Vancouver, employment increased by 13.9k (1.0%,m/m), following a rise of 9.0k in the previous month. Compared to one year ago, employment in BC was down by 0.6% (-15K) jobs.

Although national employment is still 599k below its pre-pandemic level, February's employment gain is a step in the right direction. Today's bounce-back signals that the economy is gaining momentum, as the vaccine rollout enters its next phase and public health restrictions ease. That being said, progress could be thwarted if a third wave of the pandemic forces another round of restrictions.

For more information, please contact: Gino Pezzani.
Link: https://mailchi.mp/bcrea/canadian-employment-feb-march-12-2021

Canadian housing starts decreased by 13.5% m/m to 246k units in February at a seasonally adjusted annual rate (SAAR), following a strong increase of 24% in January. Housing starts decreased in all provinces except for BC. Building activity declined in both the multi-unit (-16%) and single-detached (-9%) segments. Despite February's decline, national housing starts were up by 17% compared to the same time last year. Also, the six-month moving average was still a strong 243k units SAAR.

In BC, housing starts increased by 21% m/m to 43.5k units SAAR in February, following a decrease of 17% in the previous month. Building activity was up by 39% in the multi-unit segment, while single-detached starts were down by 14%. The rise in the multi-unit segment was led by Vancouver, which reported a 70% increase in multi-unit starts in February. Compared to the same time last year, housing starts were up by 2% in BC.

The decline in February comes on the heels of a very strong 2020. Also, the level of residential construction activity is still above pre-pandemic levels, reflecting the high demand for housing that we've seen across the country. The value of BC residential building permits was down by 1% in January, led by the multi-unit segment, while permits were up for the single-detached segment.

For more information, please contact: Gino Pezzani.
link: https://mailchi.mp/bcrea/canadian-housing-starts-feb-march-15-2021

The Bank of Canada maintained its overnight rate at 0.25 per cent this morning, a level it considers its effective lower bound. The Bank reiterated what it calls "extraordinary forward guidance" in committing to leaving the overnight rate at 0.25 per cent until slack in the economy is absorbed and inflation sustainably returns to its 2 per cent target. The Bank projects that will not occur until 2023. The Bank is also continuing its quantitative easing (QE) program, purchasing at least $4 billion of Government of Canada bonds per week. In the statement accompanying the decision, the bank noted that while the near-term outlook for growth is strong, there remains considerable slack in the economy and employment is still well below its pre-COVID levels. Inflation is expected to move modestly higher, largely reflecting base-year effects and deep price declines in some goods and services at the start of the pandemic.

The Bank of Canada was anticipating a second wave induced contraction of the economy in the first quarter of this year and so finds itself somewhat caught off guard by a vastly improved economic outlook and rising long-term bond yields. The massive $1.9 trillion COVID-19 relief package, the American Rescue Plan, recently passed by the US Congress and good news on the speed of US vaccinations has prompted a re-set of expectations in financial markets as higher economic growth and inflation gets priced into bond yields. While the Bank has continued its quantitative easing program aimed at holding Canadian long-term interest rates down, there is little it can do to combat the pressure on the Canadian yield curve from rising US long-term interest rates. Recognizing the much brighter economic outlook, the Bank may announce a tapering of its QE at its next meeting in April but will stick to its commitment to keep its policy rate on hold until 2023. That would mean a widening gap between fixed and variable mortgage rates over the next year as fixed mortgage rates rise alongside long-term interest rates.

or more information, please contact: Gino Pezzani.

Link: https://mailchi.mp/bcrea/bank-of-canada-interest-rate-announcement-m2ra3hmnqa

Vancouver, BC – March, 2021. The British Columbia Real Estate Association (BCREA) reports that a total of 10,918 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in February 2021, an increase of 89.1 per cent over February 2020 and over a thousand sales higher than the previous February record, set in 2016. The average MLS® residential price in BC was $889,584, a 17.3 per cent increase from $758,382 recorded in February 2020. Total sales dollar volume was $9.7 billion, a 121.8 per cent increase from last year.

“Near-record sales in Metro Vancouver, combined with unprecedented housing demand outside of Metro Vancouver, continues to drive a blistering pace of home sales in BC,” said BCREA Chief Economist Brendon Ogmundson.

Total active residential listings were down 28.7 per cent to 20,185 units in February, the lowest level of provincial active listings on record, going back to 2000. Fortunately, new listings have increased considerably, but given the pace of sales, total inventory of homes for sale remains severely depleted.

"There is a drought of resale inventory across the province,” added Ogmundson. "With so few listings, and with so much demand for single-detached homes, average prices have increased dramatically.”

For more information, please contact: Gino Pezzani.

For the complete news release, including detailed statistics, click: here.

As Warren Buffett’s right-hand man for more than 40 years, and a vice chairman of Buffett’s Berkshire Hathaway, billionaire Charlie Munger has had the kind of career and financial success most people can only dream of. Here is his advice for anyone who wants to rise to the top:

“Don’t sell anything you wouldn’t buy yourself.” Be true to your values. Pick a career not for how much money you can make, but for doing something you believe in and are willing to dedicate your life to.

“Don’t work for anyone you don’t respect and admire.” Be careful about who you choose to work with and for. Seek out people you can look up to and learn from them.

“Work only for people you enjoy.” Your boss and co-workers can be a source of stress or strength. Find an employer whose culture attracts like-minded people who share your values and your commitment to success.

Did You Know? Women’s History Month, celebrated every year in March, started as Women’s History Week.

Women’s History Month originally began as a local week-long celebration in Santa Rosa, California. The Education Task Force of the Sonoma County Commission on the Status of Women planned and executed a “Women’s History Week” celebration during the week of March 8, 1978 to correspond with International Women’s Day. According to womenshistory.org, the movement spread across the country as other communities initiated their own Women’s History Week celebrations the following year. In 1980, a consortium of women’s groups and historians led by the National Women’s History Project (now the National Women’s History Alliance) successfully lobbied for national recognition.

In February 1980, President Jimmy Carter issued the first Presidential Proclamation declaring the Week of March 8, 1980 as National Women’s History Week.

Subsequent presidents continued to proclaim a National Women’s History Week in March until 1987, when Congress passed a law designating March as “Women’s History Month.”

A man was walking through the park when he came upon a boy playing a game of chess against a Cat.

“This is just incredible,” the man shouted, “What a smart cat!”

“He’s all right, I guess,” the boy replied.

“I’ve already beaten him two out of three games.”