Mortgage Rate Forecast (June 2019)

The June issue of Mortgage Rate Forecast is now available on BCREA Online.

•Mortgage rates return to 2017 levels
•Canadian economy falters in first quarter
•Time for the Bank of Canada to cut rates?

Download (PDF, 319KB)

For more information, please contact: Gino Pezzani.

Canadian Monthly GDP (April 2019) – June, 2019

There are positive signs that the Canadian economy is bouncing back after six months of  slow growth. Output in the the Canadian economy rose 0.3 per cent in April following growth of 0.5 per cent in March.   The rise in GDP was the result higher output in the mining and oil and gas sectors and well as increasing wholesale trade and construction spending. Output of offices of real estate agents and brokers was up 1.3 per cent in April due to increased resale activity, largely in Ontario.

With today’s GDP report, we are tracking second quarter growth in the Canadian economy at 2.5 per cent, a major improvement from the sub-1 per cent growth of the first quarter.

For more information, please contact:  Gino Pezzani.

Canadian Retail Sales – June, 2019

Canadian retail sales rose in April for the third consecutive month by 0.1%, following a 1.3% gain in March (revised upwards from 1.1%). Retail spending increased to $51.5 billion, as 7 of 11 retail sub-sectors representing 74% of the sector reported higher sales. The main contributor to the increase in April was higher sales at gasoline stations. Behind the national gain were Manitoba (1.8%), Alberta (1.6%) and Ontario (0.9%).

In B.C., retail sales declined 0.5% from the previous month to $7.2 billion. Sales were down in the clothing, health and personal care, and food and beverage sectors. In contrast, sales were up in the housing related sectors of building material and garden equipment, and furniture stores. On a year-over-year basis, B.C. retail sales were flat in April.

The soft increase to retail sales in April was within market expectations, as harsher than normal weather conditions hit most of the Eastern provinces and households are still adjusting their spending to higher interest rates.

For more information, please contact: Gino Pezzani.

Canadian Inflation – June, 2019

Canadian inflation, as measured by the Consumer Price Index (CPI), rose by 2.4 per cent compared to the same time last year. Month-over-month, seasonally adjusted prices were up 0.3 per cent, the same gain as in the previous month. Gains were reported in all major components of the CPI, while food and transportation reported the largest increases. The Bank of Canada’s three measures of trend inflation were also up in May, averaging 2 per cent.

In B.C., CPI increased by 2.6 per cent in May compared to a year ago, marking the second highest provincial gain behind Manitoba. The increase was broad-based with the highest year-over-year gains reported in transportation (4.7 per cent), gasoline (3.9 per cent) and food (3.4 per cent).

The recent acceleration in inflation could complicate the Bank of Canada’s decision on interest rates given the broad-based nature of the rise. That being said, much of the recent gains have been driven by seasonal and volatile factors (e.g., inclement weather and traveller accommodations), which means we can expect the Bank to remain on the sidelines.

For more information, please contact: Gino Pezzani.

BC Home Sales to Rise in 2020

BCREA 2019 Second Quarter Housing Forecast

Vancouver, BC – June, 2019. The British Columbia Real Estate Association (BCREA) released its 2019 Second Quarter Housing Forecast today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 9 per cent to 71,400 units this year, after recording 78,346 residential sales in 2018. MLS® residential sales are forecast to increase 14 per cent to 81,700 units in 2020. The 10-year average for MLS® residential sales in the province is 84,300 units.

“The shock to affordability from restrictive mortgage policies, especially the B20 stress test, will continue to limit housing demand in the province this year,” said Cameron Muir, BCREA Chief Economist. “However, a relatively strong economy and favourable demographics are likely creating pent-up demand in the housing market,”

The inventory of homes for sale has climbed out of a cyclical low, leading to balanced market conditions in many areas and buyer’s market conditions in some communities and across some products types. Current market conditions are expected to provide little upward pressure on home prices this year, with the average annual residential price forecast to remain essentially unchanged, albeit down 2 per cent to $697,000. Modest improvement in consumer demand is expected to unfold though 2020, pushing the average residential price up 4 per cent to $726,000.

To view the full BCREA Housing Forecast, click here.

For more information, please contact:  Gino Pezzani.