Canadian Monthly Real GDP (August) – October, 2020

Canadian real GDP grew 1.2 per cent in August, following a 3.1 per cent increase in July.  That is the fourth consecutive monthly increase in GDP following the steepest contraction of the Canadian economy on record. The overall level of economic output remains about 5 per cent below its per-pandemic level.

Third quarter real GDP growth is currently tracking at close to 10 per cent, or about 46 per cent on a quarterly annualized basis.  From there, we anticipate a strong, albeit slower rate of growth as the economy heals and enters a “recuperation phase.”  Like the Bank of Canada, we do not expect slack in the economy to be fully absorbed until around 2023, which, given the Bank’s guidance earlier this week, means that interest rates will remain historically low for quite sometime.  Those low rates will continue to provide a significant boost to an already strong BC housing market.

For more information, please contact: Gino Pezzani.

Prevent Burnout Before it Happens

Even the most successful people have to deal with burnout— that feeling that comes when we’re overworked, overstressed, and in a slump. Here are some strategies for combating it:

  • Recognize the problem. Admit to yourself that you are burning out, and that it is a result of the way you invest your energy. Avoid blame; take action instead.
  • Keep working. Don’t give up. Instead, change how and where you invest your energy. Decide what you want, and invest your energy accordingly.
  • Enlist a partner. Tell someone how you’re going to change, and make sure that person will hold you accountable to your commitment.
  • Examine your habits. If you know certain behaviors leave you drained of motivation and enthusiasm, try to eliminate or replace them. Limit your contact with people or activities that don’t help you maintain your energy.
  • Reassess on a regular basis to preserve your sense of balance.

BCREA Market Intelligence: COVID-19: Population Growth and Housing Demand

The latest BCREA Market Intelligence: COVID-19: Population Growth and Housing Demand examines how the sharp drop in immigration this year due to the global pandemic has impacted the BC housing market.

Summary Findings:
• Immigration is the most important driver of population growth in BC, with a growing share within the prime working-age and household-forming demographic.

• The global pandemic has resulted in a sharp drop in immigration and consequently BC reporting one of the lowest quarterly increases in population growth since 2011.

• In the short term, the impact of lower population growth will weigh most significantly on the rental market due to a significant reduction in international students and new permanent residents.

Here to read the full report:

Download (PDF, 572KB)

For more information, please contact: Gino Pezzani.

COVID-19 Reopening Dashboard – Oct. 2020

The BCREA Economics team has created the COVID-19 Reopening Dashboard to help REALTORS® monitor the evolution of the economy as BC navigates the recovery. This dashboard focuses on the sectors and activities that have been most significantly impacted by the pandemic and the province’s subsequent state of emergency. Home sales in the province had a record-setting September, as pent-up demand from the spring pushed into the fall.

To monitor the province’s progress toward a “new normal,” we benchmark each indicator to February 2020, the month before the pandemic was declared. This dashboard is updated each month.

BCREA’s updated COVID-19 Reopening Dashboard is available here.

For more information, please contact: Gino Pezzani.

Bank of Canada Interest Rate Announcement – October, 2020

The Bank of Canada held its overnight rate at 0.25 per cent this morning, a level it considers its effective lower bound. The Bank is also continuing its quantitative easing (QE) program, though re-calibrated to target longer-term bonds and slightly scaled back from purchasing $5 billion per week in Government of Canada bonds to $4 billion per week. The Bank also reiterated forward guidance on future interests moves, committing to holding the policy rate at 0.25 per cent until slack in the economy is absorbed and inflation is sustainably trending at 2 per cent. In the statement accompanying the decision, the Bank noted that the Canadian economy is recovering, though at a highly uneven rate, with the pandemic particularly affecting low-income workers. Overall, the Bank expects a decline in Canadian real GDP of 5.5 per cent this year, before growing 4 per cent next year. Inflation is expected to remain below its 2 per cent target through 2022.

With the Bank committing to holding its policy rate at 0.25 per cent until slack in the economy is absorbed, and continuing its quantitative easing program of asset purchases, Canadian mortgage rates should remain at current historical lows for quite some time. Given the Bank’s forward guidance on interest rates and its projection for inflation, those low rates are anticipated to remain in place until 2023, providing a significant boost to an already strong BC housing market.

For more information, please contact: Gino Pezzani.

Best Room in the House

Just after Ulysses S. Grant had been named General-in-Chief of the armed Union forces during the Civil War, he and his son traveled to Washington, D.C.

After a long and tiring trip, they arrived on horseback at the Willard Hotel. The harried desk clerk glanced outside at the latest arrivals as they hitched up their horses and gathered their few belongings to bring inside.

From the dimly lit front desk, the clerk didn’t recognize General Grant and took him for another weary, dusty Union soldier; he decided to save his larger rooms on the first floor for any important figures who might pass through town later that day.

When Grant and his son asked for lodging, the clerk replied that the only room he had available would be on the top floor, up a long flight of steps.

Tired from travel, Grant said the small room would be fine. However, when he signed the register: “U.
S. Grant and son,” the clerk recognized his name and realized the significance of the person in front of him. Immediately he told the general that he could stay in the large, more prominent room that Abraham Lincoln had stayed in just before his inauguration as president.

With no change in expression, Grant said that would be fine, too. He hadn’t let his new rank go to his head. He was focused on the job he did by day, not the extravagance of the room he slept in by night.

Lead From Anywhere

Being part of a team doesn’t mean you can’t stand out from your peers, whether you’re in a busy workplace or working from home. To become a star, focus on the process. Here are some suggestions:

Stay on top of your industry:
Spending just 15 to 20 minutes per day doing some research on your business and industry will keep you more up-to-date than most of your peers.

Find out how you can be more valuable:

Ask managers how you can contribute more. You may get a chance to work on innovative projects that help the company achieve its goals.

Tackle the hard projects:
Volunteer for jobs others don’t want to tackle. Your peers will appreciate it— and your boss will notice, too.

Lend a hand to colleagues:

When others are struggling to get their work done, offer to help them; make sure it doesn’t distract from your own tasks, though.

Give credit to those who help you along the way:
Don’t hog the glory. Acknowledge the help you receive from your co-workers, and they’ll be more willing to support you in the future.

Reach out:
Whether you’re working from home or in a busy workplace environment, take the time to ask colleagues how they’re doing. The human connection is important and can turn a functional team into an excellent one.

Be patient:
Becoming a star won’t happen overnight. If you expect too much too soon, you’ll just set yourself up for disappointment. Keep a sense of perspective about getting ahead.

Keeping Safe at Work

Whether you’re returning to a workplace, taking over a new space or working from home, you don’t want to waste time searching for basic supplies when a minor injury happens. Keep a first aid kit accessible and well stocked with supplies, including these items:

• Adhesive bandages of assorted sizes
• Sterile gauze and adhesive tape
• Antiseptic wipes for small cuts
• Eyewash
• A cold compress that does not require refrigeration
• Tweezers for removing pesky splinters

November is also a great time to schedule safety retraining— the bustle of December is still weeks away, so now is a great time for a refresher. Remember to cover these important areas of concern:

• The importance of knowing when to dial 911 for trained emergency help.
• Proper maintenance logs of equipment, whether that is a workplace alarm system or a home heating and air conditioning unit.
• An evacuation plan in case of emergency.

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Canadian Inflation (Sept) – October, 2020

Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.5% in September year-over-year, up from the previous month’s increase of 0.1%. Excluding gasoline, the CPI rose by 1.0%. Prices rose in six of eight components year-over-year with notable increases in shelter (1.7%), food (1.6%), and health/personal care (1.6%), while prices declined for clothing/footwear (-4.1%) and recreation (-1.2%). Growth in the Bank of Canada’s three measures of trend inflation was flat in September, averaging 1.7%.

Regionally, the CPI was positive in seven provinces. In BC, CPI rose by 0.4% in September year-over-year, up from August’s increase of 0.2%. Prices continued to rise for health/personal care (3.1%), shelter (1.6%), food (1.4%), and alcohol/tobacco/cannabis (1.3%). In contrast, downward price pressures were ongoing in gas (-13.4%), clothing/footwear (-3.5%), and recreation (-2.9%).

As some provinces such as Ontario and Quebec have reinstated stricter containment measures, Canadian inflation is expected to continue to be weak. In this environment, the Bank of Canada will continue to keep interest rates low.

For more information, please contact: Gino Pezzani.