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.

In August, for the second consecutive month, Canadian real GDP was largely unchanged. A surge in sales of machinery, equipment, and supplies led to a 2.3 per cent increase in the Wholesale trade sector. Meanwhile, oil & gas extraction rose 1 per cent on higher extractions in Western Canada while mining and quarrying rose 4.2 per cent. Manufacturing, on the other hand, fell 0.6 per cent, declining for the third consecutive month. Offices of real estate agents and brokers fell for the second consecutive month, dropping 3.8 per cent as sales softened over the late summer. Overall, Canadian real GDP is now 3.6 per cent above its pre-pandemic, February 2020 level. Preliminary estimates suggest that output in the Canadian economy was again largely unchanged in the Canadian economy in September. 

With a flat August GDP number and September's preliminary estimate also flat, the Canadian economy is expected to have been largely unchanged since February, despite rapid population growth. Indeed, with the preliminary estimate for September, annualized third-quarter GDP is expected to contract 0.1 per cent, following a 0.2 per cent contraction in the second quarter. This would technically imply that the Canadian economy is in a shallow recession. Despite still too-hot inflation numbers, the Bank of Canada held its overnight rate steady at 5 per cent last week, giving the prior 10 rate hikes time to work through the economy. Given signs of weak growth and cooling labour markets, financial markets no longer anticipate additional rate hikes this cycle. 

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

For more information, please contact: Gino Pezzani.

To view the BCREA Housing Forecast PDF, click here.

BCREA 2023 Fourth Quarter Housing Forecast

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

Multiple Listing Service^® (MLS^®) residential sales in BC are forecast to decline 4.8 per cent to 76,700 units this year. In 2024, MLS^® residential sales are forecast to post a modest rebound, rising 4.8 per cent to 80,375 units. 

"Activity in the BC housing market has mirrored movements by the Bank of Canada over the past two years,“ said Brendon Ogmundson, Chief Economist. “As such, there is little reason to believe that sales will meaningfully detach from the anchor that is monetary policy over the next year. Thankfully, it appears that the Bank is at, or at least very near, the end of its tightening cycle and may begin lowering its policy rate late next year.” 

After trending down for most of the year, new listings activity has normalized in the second half of 2023, which, combined with slowing sales, has led to a modest uptick in total inventory. Still, at just over 30,000 listings, the supply of homes for sale falls considerably short of the roughly 45,000 active listings that are historically consistent with a healthy, balanced market. Prices saw a significant increase in the first half of the year, but that surge in prices has since given way to a flattening trend as market conditions balance out, albeit at a low level of market activity. We expect a 1.9 per cent decrease in annual prices for 2023 compared to 2022, with a slight uptick expected in 2024, driven by a projected recovery in the latter half of the year.

For more information, please contact: Gino Pezzani.

The Bank ofCanada maintained its overnight rate at 5 per cent this morning. In the statement accompanying the decision, the Bank noted that there is growing evidence that higher interest rates are dampening economic activity, and it expects growth to be weak through 2024. On inflation, the Bank sees little downward momentum in its preferred measures of core inflation and expects inflation to average 3.5 per cent until the middle of next year before falling back to its 2 per cent target in 2025.  Notably, the Bank stated that it is concerned that price stability is slow and inflationary risks have increased. As such, it is prepared to still raise its policy rate further if needed.

The combination of a slowing economy with inflation seemingly stuck in a range of 3 to 4 per cent muddies the outlook for rates over the next year, though as the Bank clearly stated, there is the possibility of more rate increases if inflation does not decline. Our bet is still that the impact of high interest rates will tip the economy at least briefly into negative territory, and that consumer spending will slow further. However, without significant progress on returning inflation to its 2 per cent target, households may be waiting longer than expected for relief on variable mortgage rates. Yields on five-year Government of Canada bonds have come down from their highs near 4.5 per cent but remain at their highest level in 15 years. Consequently, fixed mortgage rates have hit annual highs over 6 per cent, the impact of which is compounded by an increasingly punishing stress test. We expect five-year fixed mortgage rates may start to come down in early 2024 as bond markets price in future rate cuts by the Bank of Canada.  However, once the Bank lowers its policy rate back to neutral (2-3 per cent), fixed mortgage rates will settle at a level that is higher than borrowers have become accustomed to over the past decade.

Link: https://mailchi.mp/bcrea/bank-of-canada-interest-rate-announcement-hhun143ys0

For more information, please contact: Gino Pezzani.

Canadian housing starts rose 8 per cent to 270,466 units in September at a seasonally adjusted annual rate (SAAR). Starts were down 9 per cent from the same month last year. Single-detached housing starts rose 2 per cent from last month to 56,880 units, while multi-family and others rose 10 per cent to 213,585 units (SAAR). 

In British Columbia, starts fell 18 per cent from last month to 40,493 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 10 per cent m/m to 5,621 units while multi-family starts fell 21 per cent to 31,409 units. Starts in the province were 25 per cent below the levels from September 2022. Starts declined by 5.3k in Vancouver and by 5.4k in Victoria while rising by 780 units in Kelowna from last month. In Abbotsford, starts were unchanged. The 6-month moving average trend in BC fell by 3.5 per cent to 51,108 SAAR. 

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

For more information, please contact: Gino Pezzani.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 3.8 per cent on a year-over-year basis in September, down from 4 per cent in August. Excluding gasoline, CPI rose 3.7 per cent year-over-year in September. Shelter costs were up 6 per cent year over year, the same increase as August, driven by mortgage interest costs (up 31 per cent from last year) along with rents (up 7 per cent). Grocery prices were up 5.8 per cent year over year in September, down from 6.9 per cent in August and 8.5 per cent in July. Month over month, seasonally adjusted CPI rose 0.2 per cent. In BC, consumer prices rose 3.3 per cent year-over-year.

Price appreciation took a breather last month, bucking expectations and slowing in September. While shelter inflation continued to show high price growth, food inflation has softened significantly since the start of the year, falling by nearly half from over 10 per cent in January. While still stubbornly high, the Bank of Canada's measures of core inflation, which strip out volatile components, moderated in September. Amid weakening labour markets and flat GDP growth, this unexpectedly cool inflation report offers hope that the Bank of Canada may not need to tighten as much as expected, and bond yields fell following the release. Markets now put the majority odds on the bank holding rates steady for the remainder of the year. 

For more information, please contact: Gino Pezzani.

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

Vancouver, BC – October, 2023. The British Columbia Real Estate Association (BCREA) reports that a total of 5,531 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in September 2023, an increase of 10.4 per cent from September 2022. The average MLS^® residential price in BC was $966,530 up 4.8 per cent compared to September 2022. The total sales dollar volume was $5.3 billion, representing a 15.7 per cent increase from the same time last year.

“Home sales in BC have clearly been impacted by the Bank of Canada's recent tightening of interest rates, along with the resulting surge in mortgage rates,” said BCREA Chief Economist Brendon Ogmundson. “Home sales are once again trending at below average levels as potential buyers struggle with a high cost of borrowing.”

Active listings in the province were up slightly month-over-month at just over 33,000 total listings and were 8.1 per cent higher year-over-year.

Year-to-date BC residential sales dollar volume was down 15 per cent to $57.9 billion, compared with the same period in 2022. Residential unit sales were down 11.5 per cent to 59,570 units, while the average MLS^® residential price was down 4 per cent to $972,049.

For more information, please contact: Gino Pezzani.

Canadian employment rose by 64,000 (0.3 per cent) in September. The Canadian unemployment rate remained flat at 5.5 per cent, now unchanged for three consecutive months. Average hourly wages rose 5 per cent year-over-year to $34.01 in September, while total hours worked were up 2.6 per cent from September of last year.

Employment in BC rose 0.9 per cent to 2.81 million, while employment in Metro Vancouver rose 2 per cent to 1.61 million. The unemployment rate rose to 5.4 per cent in BC, up from 5.2 per cent in August, while remaining unchanged at 5.8 per cent in Metro Vancouver. 

Link: https://mailchi.mp/bcrea/canadian-employment-september-2023-october-6th-2023

For more information, please contact: Gino Pezzani.

Canadian real GDP was largely unchanged from the prior month in July, following a 0.2 per cent decrease in June. A decline in manufacturing activity (-1.5 per cent) pulled GDP downwards with lower inventory formation and the BC port strike as the major contributors. Meanwhile, as wildfires retreated in Eastern Canada, the mining and quarrying sector jumped 4.2 per cent. Offices of real estate agents and brokers fell 1.3 per cent, declining for the first time in 6 months. Overall, Canadian real GDP is now 3.6 per cent above its pre-pandemic, February 2020 level. Preliminary estimates suggest that output in the Canadian economy edged up 0.1 per cent in August. 

July’s GDP number came in flat as anticipated, and although economic growth appears to be softening amid rising interest rates, the advanced estimate for August remains in weakly positive territory. The Bank of Canada held its overnight rate steady at 5 per cent in September, but last week’s inflation number was hotter than anticipated, causing financial markets to revise expectations. Markets now anticipate an additional rate hike before the end of the year. With the Canadian economy continuing to avoid recession, inflation at 4 per cent, and an unemployment rate still at a rather robust 5.5 per cent, an additional rate hike in October seems likely. However, the Bank will be paying close attention to CPI and employment data before the announcement on the 25th. 

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

For more information, please contact: Gino Pezzani.