Canadian housing starts declined for the third consecutive month in August, but remain elevated by historical standards. Housing starts decreased by 10.5k to 260.2k units (-3.9% m/m) in August at a seasonally-adjusted annual rate (SAAR). Comparing year-over-year, starts were roughly unchanged from August of 2020 (-0.5% y/y). Single-detached housing starts dipped 1% in August to 80.7k, while multi-family and others declined 5% to 159.5k. 

In British Columbia, starts declined for a second consecutive month, dropping 7.5% m/m to 46.9k units SAAR in all areas of the province. Single-detached starts declined 4.4% m/m while multi-family starts declined 10%. Despite this, starts in the province in August remained 7.8% above the levels from August 2020. BC's six-month moving average for starts inched up to a record-high for a third consecutive month.

For more information, please contact: Gino Pezzani.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 4.1% on a year-over-year basis in August, rising at the fastest rate since 2003. This rise was mostly the result of an accumulation of price increases in 2021, while August itself did not post high price growth. On a seasonally adjusted month-over-month basis, the CPI was up 0.2% in August. The Bank of Canada's preferred measures of core inflation (which use techniques to strip out volatile elements) rose an average of 2.6% year-over-year in August. Major drivers of the price increase included passenger vehicles (+7.2%), furniture (+8.7%) and household appliances (+5.3%) partly on continuing supply-chain difficulties related to semiconductors. The homeowner replacement cost index, which measures the cost of replacing home structures, rose 14.3% year-over-year in August, which was the fastest rate since the 1980s. Related costs, such as commissions on the sale of real estate, also rose strongly in August. In BC, consumer prices were up 0.2% month-over-month, and up 3.5% on a year-over-year basis. 

Inflation continues to run ahead of the Bank of Canada's 2 per cent target. The driving force behind rising prices is still isolated to a few categories of spending. In particular, the rising price of gasoline and the run-up in Canadian home prices since last year. Those categories alone accounted for about half of the observed inflation in August. Home prices in Canada are beginning to flatten out, which should mean a fading impact on inflation over the next year. Likewise, the impact of gas prices should continue to decline as base-year effects have less influence. Other issues putting upward pressure on consumer prices are being driven by bottlenecks and supply shortages – which are issues that monetary policy cannot address.

For more information, please contact: Gino Pezzani.

Link: https://mailchi.mp/bcrea/canadian-inflation-august-2021

That afternoon, after all the children were aware of the basket - and all of them wanted one of the treats - the researcher told them that whoever got to the tree first could have all the goodies in the basket.

She did not lay out any rules or requirements, nor did she encourage the children to pursue the basket with any guidance at all on her part. Seated nearby, she simply held her notebook in her lap and waited, expecting to observe various approaches and plans from the different children, all trying to obtain the basket for themselves.

When she gave the signal to go, all the children gathered together in a huddle and talked in quiet tones with some interjected giggles, then held each other’s hands and ran to the tree together and worked as a group to pull down the basket.

As promised, the anthropologist let the children enjoy the whole basket of treats, but simultaneously asked them why they’d decided to run together as a group and split the treats amongst themselves. One tall child looked at her and, with genuine confusion on his face, asked:

“How can any of us be happy by taking something away from another person?”

“It is only by winning as one that we all win,” the child proclaimed.

Vancouver, BC – September, 2021.  The British Columbia Real Estate Association (BCREA) reports that a total 9,507 residential unit sales were recorded by the Multiple Listing Service^® (MLS^®) in August 2021, a decrease of 7.1 per cent over August 2020. The average MLS^® residential price in BC was $901,712, a 17.2 per cent increase from $769,691 recorded in August 2020. Total sales dollar volume was $8.6 billion, an 8.9 per cent increase from last year.

“Home sales around the province have essentially returned to normal after a record setting spring,” said BCREA Chief Economist Brendon Ogmundson. “However, we continue to see a drought in the total supply of listings as well as downward trend in new listings activity.”

Total active residential listings were down 37.9 per cent year-over-year in August and were 42 per cent below normal levels for the month of August.

Year-to-date, BC residential sales dollar volume was up 102.2 per cent to $82 billion, compared with the same period in 2020. Residential unit sales were up 67.8 per cent to 89,980 units, while the average MLS^® residential price was up 20.5 per cent to $911,245. 

For more information, please contact: Gino Pezzani.

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 the second half of 2022. The Bank is also continuing its quantitative easing (QE) program, purchasing $2 billion of Government of Canada bonds per week. In the statement accompanying the decision, the Bank noted that the the supply-chain disruptions and the pull-back in housing market activity that caused an unexpectedly weak second quarter of GDP growth were likely one-time issues and stronger growth should prevail over the second half of the year.

While inflation continues to run ahead of the Bank of Canada's 2 per cent target, the driving force behind rising prices is still isolated to a few categories of spending. In particular, the rising price of gasoline and the run-up in Canadian home prices since last year.  Home prices in Canada are beginning to flatten out, which should mean a fading impact on inflation over the next year. Likewise, the impact of gas prices should continue to decline as base-year effects have less influence.  Other issues putting upward pressure on consumer prices are being driven by bottlenecks and supply shortages – which are issues that monetary policy cannot address. Higher interest rates may stifle demand, but they do not fix microchip shortages.

We expect the Bank of Canada will proceed with caution, especially given the fourth wave of COVID. The unexpected contraction of GDP in the second quarter may push the closing of the output gap out by one or two quarters. That likely means a new time-line for the Bank to raise its policy rate with the earliest increase coming in mid-2023.

Link: https://mailchi.mp/bcrea/bank-of-canada-interest-rate-announcement-9ashztkk3t

For more information, please contact: Gino Pezzani.

Canadian employment grew for the third consecutive month in August, rising by 90,000 to 18.97 million (0.5%, m/m). Most Canadian jurisdictions had fully implemented public health reopening plans by the time Statistics Canada conducted surveys, while tourists from the United States were allowed to enter Canada without quarantining for the first time since the pandemic began. As a result, Statistics Canada is reporting positive employment figures for the month across most indicators. Canadian employment is now -0.8% (-156k) below its February 2020 pre-pandemic level, the highest level since the onset of the pandemic.

In August, Canadian employment growth was driven by gains in the private sector and the services sector, especially in food & accommodation and information, culture and recreation sectors. Gains were broadly distributed across demographic groups. The Canadian unemployment rate declined by 0.4 to 7.1%, the lowest level since the onset of the pandemic. 

In BC, employment grew by 14,400 to 2.67 million (0.5%, m/m), once again hitting the highest level since the pandemic began. For the third consecutive month, British Columbia was the sole province with employment above its pre-pandemic level. The unemployment rate declined by 0.4 in August to 6.2%, the lowest level since the pandemic began. BC has the third lowest unemployment rate in Canada, following Manitoba and Quebec. 

For more information, please contact: Gino Pezzani.

Although you should try to start your day on an upbeat note, spend some time asking yourself what might happen during the day that you’re afraid of— failure to complete a big project at work, for example, or rejection by someone you’d like to date.

Then think of what you could do to prevent failure from happening. Be on the lookout for behaviors and thoughts that add to your fear, and train yourself to change your patterns of action and thinking.

Finally, pay attention to what you learn about failure as you confront it. Use the experience of facing and overcoming your fear to confront and defeat the obstacles you face every day.

One essential skill to master when cultivating relationships is listening. If you don’t actively listen to other people, you won’t gain any wisdom from their insights. The Healthline website shares these tips for active listening:

Give people your full attention. Concentrate on their words to the exclusion of everything else. Don’t plan your response while they’re still speaking, and don’t use a pause to steer the conversation around to another topic. 

Use positive body language. Your body communicates just as much as your words do, if not more. Make sure you’re fully facing the other person.Relax your body, but lean in slightly to show interest in what they’re saying. Nod to show you’re listening and that you understand. 

Don’t interrupt. You may be tempted to jump in with an idea or solution. Restrain the impulse. Instead, wait for the other person to stop talking before asking questions or offering your point of view.

Do you remember hearing the “Clean Up” song as a young child? Maybe you’ve recently played it for some little ones? The song is meant as a sweet call to action for young children to clean up communal spaces in the home. However, I suspect all adults, myself included, could use a reminder every now and again to work in harmony, to clean up our surroundings, and restore peace and order to shared community spaces.

Although National CleanUp Day falls on September 18th this year, any day this month that works in your schedule would be a good one for a revitalization project. Perhaps your town is in need of volunteers to pick up roadside trash, or maybe you want to organize something more concrete, say, replacing old crayons at a local preschool with entirely new sets, donated for the children to enjoy?

The important thing, I think, is to choose something that speaks to you, that elicits passion, a project that promotes a cleaner community, and yet also— and this is the important part— lifts you up as well.

Fall is a month of transition. We start with those last hot days of summer and end with leaves falling all around us, a vivid indication that we are turning a corner in life. Cleaning up the world around us is certainly practical, but there is also something soulful about it; bringing sensibility to disorder is satisfying on some innate level.

The idea of cleaning up can be applied to anything from updating a business plan in order to include a new community outreach team, to serving on a Board of Directors alongside people who inspire you to make the world a better place, and in the process, refresh your personal approach to life.

Certainly, we could use a bit of revitalization with most of this year behind us, and what better time to bring a fresh start to life than this month with its increasingly crisp days? Do reach out and let me know if you decide to take on a project. I’m looking forward to hearing what you do with September!