Canadian Real GDP Growth (Q2’2016) – August, 2016

The Canadian economy contracted 1.6 per cent in the second quarter, the largest decline since the second quarter of 2009. The impact of Alberta wildfires on oil production and other other industries was the primary cause of negative growth. Excluding the large decline in crude petroleum output, real GDP increased 1.2 per cent. 

Very strong consumption growth in the second quarter and a 0.6 per cent rebound in growth in June means that the hand-off to third quarter growth should be very strong. We expect Canadian economic growth will rebound sharply in the third and fourth quarter as oil production normalizes and the federal government’s uptick in expenditures and tax credits impacts the economy. The Canadian economy is forecast to expand at an average of 2.5 per cent in the second half of 2016 and into 2017.

For more information, please contact: Gino Pezzani.

Strong BC Economy Fuels Growth in Commercial Real Estate

Vancouver, BC – August, 2016. The BCREA Commercial Leading Indicator (CLI) increased 1.7 index points in the second quarter of 2016, propelled higher by strong growth in the BC economy. The CLI index rose to a new high of 122.2, up 2.2 per cent compared to the second quarter of 2015.1

“The recent uptrend in the CLI is reflective of a strong underlying economy and accelerated employment growth,” said BCREA Economist Brendon Ogmundson. “The CLI was further boosted by a rebound in financial markets that were previously dragging the index lower.“

All components of the CLI contributed positively to the index in the second quarter with strong economic growth, and robust consumer spending in particular, acting as the primary driver. A rising CLI over the first half of 2016 pulled the underlying index trend higher following several quarters of flat growth. That rising trend points to a higher uptick in the pace of commercial real estate activity over the next two to four months.

For more information, please contact:  Gino Pezzani.

Record BC Home Sale Forecast Despite Vancouver Slowdown

Vancouver, BC – August, 2016. The British Columbia Real Estate Association (BCREA) released its 2016 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to climb 10.4 per cent to a record 113,000 units this year, eclipsing the previous record of 106,310 units in 2005. Housing demand is expected to moderate next year, with home sales declining nearly 8 per cent to 104,400 units. However, housing demand is expected to remain well above the ten-year average of 85,000 unit sales.1

“The introduction of a 15 per cent tax on foreign national home buyers in Metro Vancouver is expected to accelerate a moderating trend in the market that began earlier in the year,” said Cameron Muir, BCREA Chief Economist. “However, other regions of the province are performing above expectations and at the provincial level, largely offsetting Metro Vancouver’s deceleration.”

The average MLS® residential price in the province is forecast to increase 11 per cent to $706,900 this year and a further 5.2 per cent to $743,700 in 2017.

“While the cyclical nature of housing markets can exact a harsh toll on affordability in the short term, there is some relief for beleaguered home buyers on the horizon, added Muir. Housing starts in the province are expected to reach near record levels this year, and the highest amount since 1993. In Metro Vancouver, a record number of homes are now under construction. “A moderation in housing demand combined with a rising number of both new and resale homes on the market is expected to create more balance and less upward pressure on home prices.”

For more information, please contact: Gino Pezzani.

Stats Centre Reports for Vancouver Housing Market – July 2016

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Canadian Housing Starts – August, 2016

Canadian housing starts declined 9 per cent in July to 198,847 total units at a seasonally adjusted annual rate (SAAR) following a jump in construction activity in June.  The six-month trend in Canadian housing starts moved slightly higher to just over 201,000 units, slightly above average annual growth in Canadian households.

Housing starts in BC also declined, but were still a very robust 41,050 SAAR. On a year-over-year basis, new home construction was up 14 per cent in July due to a 25 per cent jump in single detached starts and an 11 per cent rise in multiple units. Through the first seven months of the year, BC housing starts are up 37 per cent compared to 2015.

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA were down 9 per cent year-over-year in July, dragged down by a 14 per cent decline in multiple unit starts. Single-detached starts in the Vancouver CMA were up 15 per cent. In the Victoria CMA, housing starts continue to climb, more than doubling year-over-year on strong growth in new multiple unit starts. New home construction in the Kelowna CMA rose 9 per cent as a result of 13 per cent growth in multiple unit starts. Housing starts in the Abbotsford-Mission CMA were up 25 per cent year-over-year, as a surge in single unit construction outweighed a decline in multiple units.

For more information, please contact:  Gino Pezzani.