Canadian employment was largely unchanged from the previous month, growing by 22,000 jobs to 20.536 million in August. The unemployment rate rose 0.2 points to 6.6 per cent, while the employment rate fell 0.1 percentage points to 60.8 per cent. This was the fourth consecutive month of declining employment rates with minimal changes to overall employment. Average hourly wages rose 5 per cent year-over-year to $35.16 last month, while total hours worked were up 1.4 per cent from August of the previous year.

Employment in B.C. fell 0.2 per cent to 2.839 million with a loss of 4,300 jobs in August, marking the fourth consecutive month of provincial job losses. Employment in Metro Vancouver fell 1.7 per cent to 1.584 million in August. The unemployment rate in both B.C. and Vancouver rose by 0.5 points year-over-year to 5.8 per cent and 6.3 per cent, respectively.

Overall, these employment statistics for August are indicative of a continuing cooling of the labour market. Relatively flat employment and steadily rising unemployment support the notion of another 25-basis point cut from the Bank of Canada in October. 

https://mailchi.mp/bcrea/canadian-employment-august-2024

For more information, please contact: Gino Pezzani.

BCREA 2024 Third Quarter Housing Forecast Update

Vancouver, BC – August, 2024. The British Columbia Real Estate Association (BCREA) released its 2024 Third Quarter Housing Forecast Update today.

Multiple Listing Service^® (MLS^®) residential sales in BC are forecast to increase 4.4 per cent to 76,300 units this year. In 2025, MLS^® residential sales are forecasted to strengthen further, rising to 86,475 units.

"The Bank of Canada has shifted to easing policy following aggressive tightening since 2022," said Brendon Ogmundson, BCREA Chief Economist. “This policy shift has positive implications for the BC housing market, and we expect home sales to rebound in the second half of this year with momentum carrying over into 2025. 

A steady supply of new listings and sluggish sales over the first half of the year has resulted in the total inventory of homes for sale rising to its highest level since 2019. Market conditions have been trending near the lower end of what is traditionally defined as a balanced market. As such, average home prices have mostly trended sideways over the past year, with the notable exception of Greater Vancouver where the average price has returned to its 2022 peak.

We anticipate that the average home price in BC will edge up slightly this year, rising 2 per cent to an annual average of $990,500. As home sales pick up over the next year, we expect the market to tighten and for the average price in BC to rise 2.9 per cent to an average of $1.02 million.

For more information, please contact: Gino Pezzani.

The Bank of Canada lowered its overnight lending rate this morning by 25 basis points from 4.5 per cent to 4.25 per cent. In the statement accompanying the decision, the Bank noted that growth in the Canadian economy was slightly stronger than expected in the second quarter but showed signs of softer activity through the summer.  Inflation is evolving largely as expected, and the Bank judges the economy to be in excess supply which should put further downward pressure on price growth.

Focus has shifted from whether the Bank of Canada will lower rates, to how quickly, with some analysts even looking for larger 50bps cuts in the future. The trends to watch over coming months are the state of the Canadian labour market and whether inflation is following the Bank of Canada's forecast. As long as price growth isn't deviating from expectations, and employment is not significantly weaker, we should see continued rate cuts at an orderly 25bps pace until the Bank reaches its neutral range between 2.25 and 3.25 per cent in 2025. 

For more information, please contact: Gino Pezzani.

Canadian housing starts rose 16 per cent to 279,509 units in July at a seasonally adjusted annual rate (SAAR). Starts were up 10.4 per cent from the same month last year. Single-detached housing starts were 2 per cent higher from last month at 54,189 units, while multi-family and others rose 20 per cent to 225,321 units (SAAR). 

In British Columbia, starts rose 18 per cent from last month to 47,987 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 9 per cent to 4,376 units while multi-family starts rose 21 per cent to 41,414 units. Starts in the province were 1 per cent below the levels from July 2023. Compared with last year, year-to-date starts are up by 69 per cent in Kelowna, and 29 per cent in Abbotsford. Year-to-date starts are down by 18 per cent in Vancouver, 8 per cent in Nanaimo, and by 0.6 per cent in Victoria. 

Link: https://mailchi.mp/bcrea/canadian-housing-starts-july-2024

For more information, please contact: Gino Pezzani.