Canadian real GDP declined 0.1 per cent in December, the first monthly decline since January of 2022. The decline in GDP was concentrated among goods-producing industries (-0.6 per cent) while services were flat. Canadian real GDP is now roughly 2.7 per cent above its pre-pandemic, February 2020 level. Preliminary estimates suggest that output in the Canadian economy rose 0.3 per cent in January.

Growth in the fourth quarter of 2022 was nearly unchanged from the prior quarter, following five consecutive quarters of positive growth. Declines in business inventories and business investment balanced out higher consumer and government spending and more favorable net trade. Housing investment fell 2.3 per cent on higher interest rates, as with home renovations (-2.6 per cent), new home construction (-1.4 per cent), and ownership transfer costs (-4 per cent). Overall, housing investment declined 11.1 per cent in 2022. Business investment in non-residential structures, in contrast, rose 2.5 per cent from the prior quarter, with higher investment in engineering structures driven by construction at LNG Canada's export terminal in Kitimat. 

Flat GDP numbers in the fourth quarter continue to indicate slowing in the Canadian economy. Growth in the fourth quarter was softer than expected, providing support for the Bank of Canada's decision to put a 'conditional pause' on further rate hikes as of January. However, with the overnight rate rising 425 basis points in under a year, growth is likely to remain sluggish in the coming quarters as prior rate tightening works its way through the economy. 



Link: https://mailchi.mp/bcrea/canadian-economic-growth-real-gdp-q42022

For more information, please contact: Gino Pezzani.

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Births, deaths, migration – what do these have to do with the housing market?

REBGV's Director of Economics and Data Analytics Andrew Lis explains how the StatsCan numbers can give us insights on the housing market in the latest video of our new video and blog series, The Lede. 

In each video and blog post of The Lede, Andrew will dive into topics ranging from market analysis to economic analysis, and will provide simple explanations of complex statistical concepts that can help us better understand the housing market and the economic environment around us. 

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Canadian seasonally-adjusted retail sales rose 0.5 per cent in December to $62.1 billion. Sales rose in 7 of 11 subsectors, but were led by higher sales at motor vehicle and parts dealers (+3.8 per cent) and general merchandise stores (+1.7 per cent). Core retail sales, which strips out gasoline and motor vehicle and parts dealers, rose 0.4 per cent. In volume terms, sales rose 1.3 per cent in December.

In BC, seasonally-adjusted sales fell 1.1 per cent in December. Compared to the same month last year, retail sales were up 4 per cent in the province. In the Greater Vancouver region, sales fell 0.9 per cent month-over-month and were up 3.7 per cent year-over-year. 

In December, Canadian e-commerce sales fell 1.6 per cent to $4.4 billion, corresponding to 6.5 per cent of retail sales. This percentage remains elevated relative to pre-pandemic levels, but is lower than during core months of the pandemic in 2020 and 2021. 




Link: https://mailchi.mp/bcrea/canadian-retail-sales-december-2022-february-21-2023

For more information, please contact: Gino Pezzani.

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Canadian prices, as measured by the Consumer Price Index (CPI), rose 5.9 per cent on a year-over-year basis in January, a decrease from the 6.3 per cent rate in December. Slower appreciation in prices of cellular services and passenger vehicles contributed to slowing the overall pace of price appreciationRising interest rates contributed to an increase in mortgage interest costs, which were up 21.2 per cent year-over-year, the fastest pace since 1982, as Canadians renewed or initiated higher-rate mortgages. In contrast, the Homeowner's Replacement Cost, which tracks home prices, continued to slow, increasing 4.3 per cent year-over-year in January. Month-over-month, on a seasonally-adjusted basis, prices were up 0.3 per cent in January. In BC, consumer prices rose 6.2 per cent year-over-year, down from 6.6 per cent last month.

There continue to be encouraging signs that the bout of rapid price appreciation that began in January of last year is waning. Although gasoline prices were up from last month due to refinery closures, and food prices continue to rise quickly, unclogging supply chains are softening vehicle and durable good prices, pulling down the index. The Bank of Canada's measures of core inflation, which strip out volatile components, ticked downwards for a second month in a row. Although price appreciation may be moderating, it is still well above the Bank of Canada's 2 per cent target, and while the Bank has announced a conditional pause on further rate hikes, they could change course if inflation does not continue to cool. 

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

For more information, please contact: Gino Pezzani.

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Vancouver, BC – February, 2023. The British Columbia Real Estate Association (BCREA) reports that a total of 3,047 residential unit sales were recorded in Multiple Listing Service® (MLS®) systems in January 2023, a decrease of 50.3 per cent from January 2022. The average MLS® residential price in BC in 2023 has seen a dip to $872,934, down 16.1% compared to the average price of over $1 million in January 2022, which was recorded near the peak of the market. The total sales dollar volume was $2.7 billion, representing a 58.3% decrease from the same time in the previous year. 

“Provincial sales are off to a slow start in 2023 as activity continues to be weighed down by high borrowing costs,” said BCREA Chief Economist Brendon Ogmundson. “While average prices have flattened out in many markets over the past few months, year-over-year measures reflect the decline that occurred from the peak in 2022, as well as a marked shift in the composition of sales away from more expensive homes.”
 
The total number of active listings has significantly increased compared to the record low level recorded at the start of 2022. However, at just under 22,000 total listings, the inventory of homes for sales remains well below normal for January as a scarcity of new listings in many markets has muted the impact of slow sales activity.

For more information, please contact: Gino Pezzani.

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Canadian housing starts declined 13.3 per cent to 215,365 units in January at a seasonally-adjusted annual rate (SAAR). Starts were down 6.9 per cent from January of 2022. Single-detached housing starts rose 9.5 per cent to 62.9k, while multi-family and others fell 20.1 per cent to 152.5k (SAAR). 

In British Columbia, starts fell by 13.6 per cent in January to 50.1k units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 11.3 per cent m/m to 5.9k units while multi-family starts fell 14.2 per cent to 40.6k units. Starts in the province were 29.1 per cent above the levels from January 2022. Starts were up by 2.4k in Victoria and 0.1k in Kelowna, while falling 5.4k in Vancouver and 1.5k in Abbotsford. The 6-month moving average trend rose 0.6 per cent to 50.7k in BC in November. 

Link: https://mailchi.mp/bcrea/canadian-housing-starts-january-2023

For more information, please contact: Gino Pezzani.

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Canadian employment rose to 20.03 million in January, up by 150,000 (0.5 per cent). The Canadian unemployment rate held steady at 5 per cent, hovering just above all-time lows. Employment gains were concentrated among workers aged 25 to 54; workers in Ontario, Quebec, and Alberta; and workers in wholesale and retail trade, health care and social assistance, and educational services. Average hourly wages were up 4.5 per cent from January of last year, while total hours worked were up 5.6 per cent year-over-year. 


Employment in BC rose by 7,700 (0.3 per cent) to 2.771 million in January, while Metro Vancouver's employment rose by 0.4 per cent month over month. BC's unemployment rate rose to 4.4 per cent, still near record lows, while Metro Vancouver's rate rose to 4.7 per cent. Among the provinces, only Quebec, Manitoba, and Saskatchewan currently have a lower unemployment rate. 

 

Link: https://mailchi.mp/bcrea/canadian-employment-january-2022-february-10-2023

For more information, please contact: Gino Pezzani.

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At a glance (2 minute read)
  • Amendments to the Strata Property Act that increase contingency reserve fund minimums are coming November 1, 2023.

  • Changes to the From B Information Certificate requiring a summary of the strata corporation’s insurance coverage to be included will be coming April 1, 2023.

Strata property owners in stratas which have been neglecting maintenance, risking higher insurance costs, will have new protections starting November 1, 2023.

Amendments to the Strata Property Act will raise the minimum amount developers and strata corporations must contribute to the contingency reserve fund (CRF), ensuring there are adequate finances for maintenance.

Increasing the CRF

Strata corporations in BC are required to have a CRF to pay for infrequent common expenses, such as maintenance work and emergencies.

These new rules will increase the minimum amount that developers and strata corporations are required to contribute to a CRF, to at least 10 per cent of the annual operating expenses from the previous five per cent.

Developers are required to include a CRF contribution in a new building’s interim budget to be equal to at least 10 per cent of the operating expenses.

The goal is to prevent developers from advertising unrealistically low strata fees to prospective buyers and avoid unexpected increases in strata fees in the building’s first years.

The new minimums were set with the advice of strata managers and homeowner representatives.

The majority of the approximately 34,000 strata corporations in the province exceed this minimum amount and won’t be affected by this change, according to strata industry experts.

Mitigating risk

BC Financial Services Authority advised in a Report on the State of Strata Property Insurance in British Columbia, that improved maintenance and risk-mitigation practices are needed to reduce more pressure on premiums and deductibles.

For the small number of strata corporations that need to contribute more funds to their CRF to meet the new minimums, this will reduce their risk of strata insurance claims and premium increases, and significant special levies on short notice.

Form B changes

The province is also enacting changes to the Form B Information Certificate.

A summary of the strata corporation’s insurance coverage must be included in the form, effective April 1, 2023. This will make it easier for prospective buyers and strata owners to know whether the property is adequately insured, and the amount of insurance individual owners need to purchase.  

Learn more

Read the government news release.

Read the Report on the State of Strata Property Insurance in British Columbia. (opens 84-page pdf)

If you have questions about these amendments to the Strata Property Act, please contact Harriet Permut, director of government relations at hpermut@rebgv.org.

For more information, please contact: Gino Pezzani.


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