To view the full interactive Commercial Leading Indicator, click here.
To view the full Commercial Leading Indicator PDF, click here.   

The BCREA CLI fell 0.4 points to 145.9 in the second quarter of 2024, while the six-month moving average also fell to 146.1. The index is unchanged from the same time last year.

Second Quarter Highlights:

• The economic activity index declined in Q2 by 0.57 points. Inflation-adjusted retail trade (-1.6 per cent), and wholesale trade (-2.4 per cent) both fell from the previous quarter, pushing the economic component down in spite of growth in manufacturing sales (+2.1 per cent).

• Office employment (financial, insurance, real estate, and professional services) rose by 3.2 per cent in the second quarter, while manufacturing employment increased by 0.6 per cent. The overall employment component rose by 0.76 points from the previous quarter, contributing positively to the index.

The financial component of the index also declined in the second quarter by 0.46 points. Real Estate Investment Trust (REIT) prices declined by -7.5 per cent, pushing the component down. However, interest rate spreads declined for a second consecutive quarter, indicating less perceived short-term risk in the economy. This offset some of the effects of declining REIT prices on the CLI, but the financial component was still negative on net.

For more information, please contact: Gino Pezzani.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 2.5 per cent on a year-over-year basis in July, down from a 2.7 per cent increase in June. Month-over-month, on a seasonally adjusted basis, CPI rose by 0.3 per cent in July. The deceleration in headline CPI was widespread across sectors, primarily driven by declining prices on electricity, passenger vehicles, and travel tours. Excluding gasoline, the CPI rose 2.5 per cent in July. Gasoline placed further upward pressure on inflation in July, with a year-over-year growth rate of 1.9 per cent compared to 0.4 per cent in June. Downward pressure from electricity and other factors drove shelter costs down from 6.2 per cent in June to 5.7 per cent in July year-over-year. Mortgage interest costs were up 21 per cent and rent was up 8.5 per cent from last July. Finally, durable goods costs fell 1.7 per cent while services costs rose 4.4 per cent year-over-year. In BC, consumer prices rose 2.8 per cent year-over-year, up from 2.6 per cent in June. The Bank of Canada's preferred measures of core inflation, which strip out volatile components, fell to between 2.4 and 2.7 per cent year-over-year in July.

Canada's inflation report for July continued the positive overall trends in June, with headline CPI reaching its lowest level since March 2021. This was achieved in part due to declines in nearly all travel-related services in July year-over-year. However, this is largely a base-year effect, as July 2023 experienced soaring travel-related prices due to it being the first summer without restrictions related to the COVID-19 pandemic.  Moreover, CPI-median and CPI-trim continue declining towards the mid-point of the Bank of Canada's target range. Taken together, July's inflation report bolsters the likelihood of a third consecutive rate cut from the Bank of Canada in September. 

https://mailchi.mp/bcrea/canadian-inflation-july-2024-august-20th-2024

For more information, please contact: Gino Pezzani.

As most of you will already know, the BC Government recently introduced and passed into law Bill 14, which makes several changes to the Residential Tenancy Act (RTA). The bill, which came into effect on July 18, 2024, is intended to protect residential tenants from tenancies terminated in bad faith.

While the intent of Bill 14 may have been noble, this is yet another example of the provincial government announcing new legislation without doing adequate advance consultation around unintended consequences. In collaboration with the Canadian Mortgage Brokers Association – BC, we have taken steps to identify multiple issues with the bill that need to be immediately addressed. We have issued tandem open letters to government along with a joint press release issued last Thursday. Thus far, our messaging has been amplified by the Globe and Mail, Financial Post, Business Examiner, Storeys, and Real Estate Magazine, among others.

This messaging is exceedingly important. Bill 14 has created significant confusion when applying its rules to real-life real estate practice, and we’ve already heard from REALTORS^® who’ve experienced this firsthand.

For example, the new requirement of providing four months’ notice for evictions due to personal or caretaker use – instead of the previous two months’ notice – is posing a major hurdle. While this is a problem for all buyers, it's particularly problematic for high-ratio buyers, including first-time buyers, who generally need mortgage default insurance to secure their financing.

The legislation also makes no distinction between a buyer of a tenanted unit who just wants to move into their new home and a landlord who might be using a bad-faith eviction as a tool to raise rents beyond the allowable limit.

In light of these and several other concerns, the BCREA Government Relations Committee has sent a letter to BC Minister of Housing Ravi Kahlon outlining our concerns and suggesting potential fixes. We also issued a press release to the media.

Click here to read our full letter to government.

Click here to read the press release.

Sample media coverage and press release pick-up:  

• New BC eviction rules might worsen housing affordability crisis, say industry groups | Canadian Mortgage Professional (mpamag.com) 

• BCREA and CMBA-BC urge revisions to Residential Tenancy Act amendments to avoid adverse impacts (realestatemagazine.ca) 

• How BC's New Four-Month Eviction Notice Rule May Affect First-Time Buyers (storeys.com)

• BC Real Estate Association and Canadian Mortgage Brokers Association – BC Identify Significant Issues with Changes to Residential Tenancy Act | Financial Post

• BC Real Estate Association and Canadian Mortgage Brokers Association – BC Identify Significant Issues with Changes to Residential Tenancy Act - The Globe and Mail 

• ORGANIZATIONS CALL ON GOVERNMENT TO AMEND RESIDENTIAL TENANCY ACT | Business Examiner 

If you have questions or concerns about changes to the RTA or any other policy issue, please contact me.

Sincerely,

Gino Pezzani

RE/MAX Heights Realty

(604)418-9366