Canadian employment rose slightly to 20.13 million in April, up by 41,400 (0.2 per cent). The Canadian unemployment rate held steady at 5 per cent, unchanged since December. Employment gains were concentrated in wholesale and retail trade (+24,000); transportation and warehousing (+17,000); and information, culture and recreation (+16,000). Average hourly wages were up 5.2 per cent from April of last year.

Employment in BC was little changed in April, rising 0.1 per cent to 2.78 million, while declining by 0.1 per cent in Metro Vancouver to 1.564 million. The unemployment rate rose to 5 per cent in BC and to 5.4 per cent in Metro Vancouver. The rise was driven both by a rise in labour force participation, but also an increase in the number of unemployed workers. 

Link: https://mailchi.mp/bcrea/canadian-employment-april-2023-may-5th-2023

For more information, please contact: Gino Pezzani.

I wanted to take a moment to reflect on the unpredictability of life and the importance of being flexible in the face of adversity. Life has a funny way of throwing us curveballs when we least expect it.

One of the biggest lessons I have learned in life is the importance of trust. Trusting in ourselves, in others, and in the journey of life itself is essential to successfully navigate through unpredictable ups and downs.

1. When we trust in ourselves, we have the strength to persevere and find new solutions to problems.

2. When we trust in others, we build a supportive community around us that can get us through tough times.

3. When we trust in life, we open ourselves up to new experiences and opportunities, even when things don't go as planned. 

Being flexible is key in navigating unpredictable moments. We must be open to change, be willing to adapt, and embrace new perspectives. When we are rigid in our thinking and our approach, we limit ourselves and miss out on opportunities for growth. On the other hand, when we are flexible, we are more resilient, more creative, and more capable of overcoming obstacles.

Wishing you all the best,

Gino Pezzani

May Day, May 1: A celebration of spring and workers' rights, observed in many countries worldwide.

National Teachers Day, May 2: A day for honoring teachers and recognizing the lasting contributions they make to our lives.

Cinco de Mayo, May 5: A holiday that celebrates the Mexican army's victory over French forces at the Battle of Puebla in 1862.

Mother's Day, May 14: This is a day to honor mothers and mother figures, and their influence in society.

Memorial Day, May 29: A federal holiday in the United States, observed as a day to honor military personnel who have died in service. It also represents the unofficial start of summer.

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

Vancouver, BC – April, 2023. The British Columbia Real Estate Association (BCREA) reports that a total of 7,118 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in March 2023, a decrease of 38.3 per cent from March 2022. The average MLS^® residential price in BC was 961,451 down 11.6 per cent compared to the average price of close to $1.1 million in March 2022, recorded near the market's peak. The total sales dollar volume was $6.8 billion, representing a 45.5 per cent decrease from the same time last year. 

“The BC housing market is currently characterized by slow sales but also still very low levels of listings,” said BCREA Chief Economist Brendon Ogmundson. “Consequently, even though home sales remain about 20 per cent below normal levels for this time of year, the average home price in BC has now risen two months in a row, reaching its highest level since May 2022 as markets tighten due to a lack of supply.”

Active listings in the province are up 25 per cent compared to this time last year but have fallen for the second straight month in the wake of a modest recovery in home sales and continued weak new listings activity.

For more information, please contact: Gino Pezzani.

The Bank of Canada maintained its overnight rate at 4.5 per cent this morning. In the statement accompanying the decision the Bank noted that demand in Canada still exceeds supply and labour markets remain tight and that first quarter economic growth looks stronger than expected. However, the bank expects consumption growth to slow this year as households renew mortgages at higher rates and growth in exports and investment will decline as the US economy slows substantially in coming months. On inflation, the Bank expects headline CPI inflation to fall to 3 per cent in the middle of this year before declining gradually to 2 per cent by the end of 2024. However, the Bank warned getting inflation back to 2 per cent will be challenging given still high inflation expectations, elevated service sector prices and strong wage growth.

The Bank of Canada has moved to the sidelines while it judges the past year's impact of rate increases on inflation. Several factors point to inflation beginning to normalize this year. Barring a significant shift, gas prices are starting to subtract from year-over-year CPI inflation and raw materials and shipping costs should benefit from a downtrend in global commodity prices and a normalization of supply chains. The open question for the economy remains whether a recession is likely to occur this year. Given the pace and magnitude of tightening by the Bank of Canada, and signals from traditional recession warning tools like the slope of the yield curve, the recession probability remains elevated, particularly given added uncertainty stemming from failures in the US banking sector. However, growth has remained firmer than expected and the economy continues to create jobs at a robust pace.  Still, high interest rates will start to drag on the broader economy this year and slower growth and significant progress on inflation should keep the Bank sidelined with the possibility of a rate cut in early 2024.

Link:  https://mailchi.mp/bcrea/bank-of-canada-interest-rate-announcement-q5qgobpjy0

For more information, please contact: Gino Pezzani.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 4.3 per cent on a year-over-year basis in March, a decrease from the 5.2 per cent rate in February. This large drop was mostly due to base year effects; the CPI was rising quickly this month last year and fuel prices in particular are substantially down from a year ago. Grocery prices continue to rise quickly, up 9.7 per cent from last year, following seven consecutive months of double-digit increases. Mortgage interest costs were up 26.4 per cent year-over-year, the fastest pace on record, as Canadians renewed or initiated higher-rate mortgages. In contrast, the Homeowner's Replacement Cost, which tracks home prices, continued to slow, increasing 1.7 per cent year-over-year in March, down from 3.3 per cent in February. Month-over-month, on a seasonally-adjusted basis, prices were up 0.1 per cent in March. In BC, consumer prices rose 4.7 per cent year-over-year.

There continue to be encouraging signs that the bout of rapid price appreciation that began in February of last year is waning. Although food prices and mortgage interest costs continue to rise quickly, most other categories in the index are trending back toward normal price trends. Indeed, excluding mortgage costs, the year-over-year change in CPI was just 3.6 per cent. The Bank of Canada's measures of core inflation, which strip out volatile components, each ticked downwards for a fourth month in a row. The three-month annualized change in seasonally-adjusted CPI is now well within the bank's 1-3 per cent target range, hitting 2.1 per cent in March. Still, although year-over-year price appreciation may be moderating, at 4.3 per cent it is still well above the Bank of Canada's 2 per cent target. While the Bank of Canada held the overnight rate steady at 4.5 per cent for a second consecutive meeting in April, the Bank could change course if inflation does not continue to cool or if the economy dips toward recession. 

Link: https://mailchi.mp/bcrea/canadian-inflation-march-2023

For more information, please contact: Gino Pezzani.

Canadian real GDP inched up 0.1 per cent in February, following a 0.6 per cent jump in January. Both goods-producing and services-providing sectors of the economy grew 0.1 per cent. Growth was led by the public sector (+0.2 per cent), professional, scientific and technical services (+0.6 per cent), and construction activity (+0.3 per cent). Canadian real GDP is now roughly 3.4 per cent above its pre-pandemic, February 2020 level. Preliminary estimates suggest that output in the Canadian economy declined 0.1 per cent in March, implying an annualized growth rate of 2.5 per cent in the first quarter.

On the heels of unexpectedly high real GDP growth in January, February's low figure, alongside preliminary data indicating a slight contraction in March, appears more consistent with the Bank of Canada's expectations for slowing economic growth in 2023. Growth was softer than expected in the fourth quarter of 2022, supporting the Bank of Canada's 'conditional pause' on further rate hikes, and ignoring January, this slowness appears to be continuing in February and March. Due to the long lag of monetary policy, the effects of last year's tightening are still working their way through the economy, and further slowing in GDP and the labour market is anticipated in the second half of 2023. This slowing of growth is likely good news for inflation, which has been trending close to the bank's 2 per cent target in recent months. The next Bank of Canada rate announcement is on June 7th. 

Link: https://mailchi.mp/bcrea/canadian-real-gdp-growth-february-2023

For more information, please contact: Gino Pezzani.

To view the BCREA Housing Forecast PDF, click here.

BCREA 2023 Second Quarter Housing Forecast

Vancouver, BC – May, 2023. The British Columbia Real Estate Association (BCREA) released its 2023 Second Quarter Housing Forecast today.

Multiple Listing Service^®(MLS^®) residential sales in BC are forecast to decline 6.6 per cent to 75,530 units this year. In 2024, MLS^® residential sales are forecast to post a strong rebound, rising 19.3 per cent to 90,100 units

“An uptick in home sales to start the spring, despite still high mortgage rates, indicates how much pent-up demand there is in the market waiting to be unlocked,” said BCREA Chief Economist Brendon Ogmundson. “With the Bank of Canada on hold and fixed mortgage rates still stubbornly high, home sales are unlikely to fully normalize this year.”
 
While home sales remain close to 25 per cent below normal, the inventory of homes for sale has not accumulated significantly as potential sellers have held off on listing their homes in a down market. While significant uncertainty surrounds the economic outlook, the current market shows no signs of financial vulnerability or highly motivated sellers. As sales recover into a low inventory market, prices will likely begin to rise month-over-month and finish the year higher than at the start. However, on an annual basis, average prices are still expected to be down about 6.1 per cent from a record high in 2022.   

For more information, please contact: Gino Pezzani.

The BCREA Housing Monitor Dashboard has been updated with the latest data up to April 25, 2023. Click here to access the latest dashboard.

About BCREA’s Housing Monitor Dashboard

The BCREA Economics team has created the Housing Monitor Dashboard to help REALTORS^® monitor BC’s housing market. This dashboard, which is updated monthly, provides up-to-date data on key variables for public education and use. Focuses include: 

• Resale Home Market
• Construction
• Rental Market
• Borrowing Costs
• Other BCREA Data

In the dashboard, the image and data are available for download under each chart, where possible. 

For more information, please contact: Gino Pezzani.