Canadian seasonally-adjusted retail sales rose 1.6% to $57.6 billion in October. The rise was driven by a rebound in sales at motor vehicle and parts dealers (+2.2%) as new car sales (+2.8%) recovered from previous declines. The effects of the semiconductor shortage which had curtailed sales of new cars eased somewhat in October. Preliminary estimates, based on roughly 40.9% of respondents reporting so far to Statistics Canada, indicate that retail sales rose 1.2% in November. 

In BC, seasonally-adjusted sales rose 0.3% in October. Compared to the same month last year, retail sales were up 1.6% in the province. Clothing sales rose the largest amount on a year-over-year basis in October, up 13.3%. In the Greater Vancouver region, sales rose 1.5% month-over-month and were up 10.8% year-over-year. 

In October, Canadian e-commerce sales rose from $3.2 billion to $3.3 billion. As a result, e-commerce increased from 5.4% of total retail sales in August to 5.5% in October. This percentage is lower than at most points since the onset of the pandemic but is elevated compared to pre-pandemic levels. 

Link:  https://mailchi.mp/bcrea/canadian-retail-sales-october-2021

For more information, please contact: Gino Pezzani.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 4.7% on a year-over-year basis in November, matching the rate in October. On a month-over-month basis, the CPI was up 0.2% in November. The Bank of Canada's preferred measures of core inflation (which use techniques to strip out volatile elements) rose an average of 2.7% year-over-year in November. Higher prices for gasoline (+43.6%), furniture (+8.7%) and food (+4.4%) were the main drivers of growth in the headline CPI. Continuing supply-chain difficulties continued contributing to price gains, but the flooding in BC had no effect as data was collected prior to the floods in November. In BC, consumer prices were up 0.2% month-over-month, and up 3.3% 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 in November year-over-year was a 10% increase in transportation costs due to rising gasoline prices. Inflation from shelter costs was up month-over-month as home prices trended higher after flattening out over the summer. Those categories account for about 65% of the year-over-year rise in consumer prices in November. We expect this elevated level of inflation to persist through next year before prices begin moderating. The Bank of Canada is clearly concerned about rising consumer prices and have signaled that it will begin raising its policy rate in the second or third quarter of 2022.

For more information, please contact: Gino Pezzani.
Link: https://mailchi.mp/bcrea/canadian-inflation-november-2021

Canadian housing starts rose to 301.3k units in November, reversing 5 months of consecutive declines. Housing starts were up by 62.9k (26.4% m/m) in November at a seasonally-adjusted annual rate (SAAR). Comparing year-over-year, starts were up strongly from November of 2020 (15% y/y). Single-detached housing starts dipped 1% in November to 73.3k, while multi-family and others jumped 38.9% to 228k (SAAR). 

In British Columbia, starts were up 9.8% in November, rising to 39.8k units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts dropped 2.8% m/m to 7.2k units while multi-family starts offset this drop with a 13.7% rise to 28.5k units. Starts in the province were 20.1% below the levels from November 2020. Starts were down by 2.2k units in Vancouver but were offset by a 3.6k unit rise in Kelowna in November. The 6-month moving average trend declined 1.3k in November in BC. 

Link: https://mailchi.mp/bcrea/canadian-housing-starts-november-2021

For more information, please contact: Gino Pezzani.

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

For immediate release

Vancouver, BC – December, 2021. The British Columbia Real Estate Association (BCREA) reports that a total of 9,159 residential unit sales were recorded by the Multiple Listing Service^® (MLS^®) in November 2021, a decrease of 3.4 per cent from November 2020. The average MLS^® residential price in BC was $993,922, a 22.1 per cent increase from $814,310 recorded in November 2020. Total sales dollar volume was $9.1 billion, a 17.9 per cent increase from the same time last year. “Provincial MLS^® home sales reached a new annual record in November with still one month to go in 2021,” said BCREA Chief Economist Brendon Ogmundson. “Home sales have already surpassed the previous annual record of 112,425 units set in 2016.”

Total active residential listings continued to tumbler lower, falling 39 per cent year-over-year to a record low for the province. Active listings are now about half of the level reached prior to the pandemic. 

Year-to-date, BC residential sales dollar volume is up 63.6 per cent to $108.7 billion compared to the same period in 2020. Residential unit sales were up 37.7 per cent to 117,973 units, while the average MLS^® residential price was up 18.8 per cent to $921,806. 

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 occur in the middle quarters of 2022. In the statement accompanying the decision, the Bank noted that recent economic indicators signal considerable momentum to end 2021, but the Omicron COVID-19 variant has injected renewed uncertainty into the global economy and flooding in British Columbia could weigh on growth in the short-term by compounding supply chain issues and reducing demand for some services. The Bank still expects inflation to ease back to its 2 per cent target by the second half of next year.

We expect the Bank will raise its overnight rate two times next year, followed by quarterly increases in 2023, bringing the overnight rate back to its pre-pandemic level by the end of 2023. It is possible that the Bank may act earlier or more aggressively next year, however the realities and uncertainties of the pandemic are still very much a presence in the global economy, particularly with the emergence of new COVID-19 variant. Consequently, it would not be surprising if the Bank of Canada had to delay its current expected schedule of rate increases.

Link:  https://mailchi.mp/bcrea/bank-of-canada-interest-rate-announcement-9kh35j8k7j

For more information, please contact: Gino Pezzani.

Click here to view the December 2021 Mortgage Rate Forecast. 

Highlights:

1. Bond yields jump higher; fixed mortgage rates follow

2. Canadian economic growth still constrained by supply shortages

3. Bank of Canada – higher, faster?

For more information, please contact: Gino Pezzani.