Canadian Retail Sales – June, 2016

Canadian retail sales bounced back from a decline in March to post 0.9 per cent growth in April.  Sales were higher in 7 of 11 subsectors with the largest contribution coming from gasoline stations due to higher prices at the pump. With today’s release, first quarter real GDP growth in Canada is tracking at under 1 per cent, largely due to the negative impact of wildfires in Alberta. 

BC reported the largest gain among all provinces in April with retail sales rising 2.4 per cent from March. On a year-over-year basis, retail sales were almost 8 per cent higher. Strong consumer demand is a major reason the BC economy is performing so well in 2016, with economic growth tracking at 3.5 per cent for the first five months of the year. 

For more information, please contact:  Gino Pezzani.

 

Canadian Inflation – June, 2016

The Consumer Price Index (CPI), which measures the rate of inflation in Canada, rose 1.5 per cent in the 12 months to May, down 0.2 points from inflation in April. Gasoline prices were a significant drag on overall inflation, excluding gasoline, inflation was running at 1.9 per cent. The Bank of Canada’s core measure of inflation, which excludes volatile components like food and gasoline increased 0.1 point to 2.1 per cent, close to the Bank’s target for inflation of 2 per cent. In BC, provincial consumer price inflation was 1.7 per cent.

With inflation held in check by flagging commodity prices and a slow growing economy, there is very little pressure on the Bank of Canada to tighten interest rates. Given the current outlook for the Canadian economy, inflation should remain below target over the next two years, keeping the Bank on the sidelines for the foreseeable future.

For more information, please contact: Gino Pezzani.

Canadian Manufacturing Sales – June, 2016

Canadian manufacturing sales broke a string of consecutive down months, rising 1 per cent in April. Sales were higher in just 10 of 21 industries representing about half of all manufacturing sales, with the largest gains coming from the petroleum and coal industry and sales of transportation equipment. In inflation adjusted terms, total sales were up 1.4 per cent.

In BC, where the manufacturing sector employs approximately 170,000 people, sales fell 1.3 per cent on a monthly basis but were up 2.2 per cent year-over-year. The manufacturing and export sector is the one piece of the provincial economy that is lagging behind otherwise very strong growth in 2016. With improvement in the US economy as well as BC’s major provincial trading partners like Alberta, we expect that the manufacturing sector should be pulled out of its current sluggish growth, providing a further boost to an already robust BC economy.

For more information, please contact:  Gino Pezzani.

Record Home Sales Creates Wave of New Home Construction

Vancouver, BC – June, 2016. The British Columbia Real Estate Association (BCREA) reports that a record 13,458 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, up 32.3 per cent from the same month last year. Home sales last month exceeded April’s record of 12,969 units. Total sales dollar volume was $9.72 billion in May, up 51.1 per cent compared to the previous year. The average MLS® residential price in the province was up 14.2 per cent year-over-year, to $722,146.11

“Record housing demand and dwindling inventories are continuing to push home prices higher in most BC regions,” said Cameron Muir, BCREA Chief Economist. “Total active residential listings across the province are nearly 30 per cent lower than twelve months ago.“

“New home construction activity is at a near record pace in the province,” added Muir. In the Metro Vancouver market, a record number of homes are now under construction. “Once the current crop of homes are ready for occupancy there will likely be more selection for home buyers and less upward pressure on home prices.”

Year-to-date, BC residential sales dollar volume increased 62 per cent to $41 billion, when compared with the same period in 2015. Residential unit sales climbed by 35.2 per cent to 54,455 units, while the average MLS® residential price was up 19 per cent to $752,105.

For more information, please contact:  Gino Pezzani.

May 2016 Housing Market Update – The Real Estate Board of Greater Vancouver