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Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 2.4 per cent in January year-over-year, following a 2.2 per cent increase in December. Excluding the impact of higher gasoline prices, national CPI rose by 2.0 per cent year-over-year. The rise in gas prices in January were largely a function of concerns over global oil supplies in response to international political events. The Bank of Canada's three measures of trend inflation fell to average 2.0 per cent in January.

In B.C., CPI grew to 2.3 per cent year-over-year, above last month's increase of 2.1 per cent. Notable increases in prices were for gas and alcohol, tobacco and cannabis. In contrast, prices for household furnishings fell. 

Although the Bank of Canada has noted that inflation has been close to its target, the Bank will likely continue its cautious approach and look for major deterioration in other key economic indicators before deciding on a course of action at their next  interest rate announcement in March.


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The British Columbia Real Estate Association (BCREA) reports that a total of 4,426 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in January 2020, an increase of 23.7 per cent from the 3,579 units sold in January 2019. The average MLS® residential price in BC was $725,370, a 9.1 per cent increase from $664,633 recorded the previous year. Total sales dollar volume in January was $3.2 billion, a 35 per cent increase over 2019.

“Housing markets in BC are off to a strong start in 2020,” said BCREA Chief Economist Brendon Ogmundson. “We expect a much more typical year of home sales in 2020 as markets recover from the policy-induced slowdown of the past two years.”

Total MLS® residential active listings fell 12.6 per cent to 25,790 units compared to the same month last year. The ratio of sales to active residential listings increased to 17.2 per cent from just 12.1 per cent last January. 

“While many markets are showing strong signs of recovery, the struggling forestry sector is having a clear impact on housing demand, particularly in the North and parts of Vancouver Island,” added Ogmundson.
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Canadian housing starts increased by 8.8% m/m in January to 213,224 units at a seasonally adjusted annual rate (SAAR). The increase was led by Ontario and Quebec. The trend in national housing starts fell, averaging about 211,000 units SAAR over the past six months. 

In BC, housing starts fell by 39% m/m to 26,237 units SAAR, which follows last month's strong reporting of 42,864 units. The last time provincial sales were this low was May 2015. The inclement weather in the province likely delayed starts for many projects so we could expect a pick-up in the following months. Compared to the same time last year, provincial starts were down by 39%.  

Looking at census metropolitan areas in BC: 

Housing starts in Vancouver were down by 53% in January to 12,927 units SAAR. Compared to last year in January, housing starts were down by 49%. The decline was largely due to a contraction in the volatile multi-unit segment (-54%), though singles were also down (-21%).  

In Victoria, housing starts were down by 79% m/m to 698 units SAAR, entirely driven by the multi-unit segment. Compared to a year ago in January, housing starts were down by 76%.  

In Kelowna, housing starts increased by 77% m/m to 1,610 units SAAR, following low levels reported in the previous month. The increase was due to the multi-unit segment. Year-over-year starts were down by 62% in the region. 

Monthly housing starts in Abbotsford-Mission were up by 20% at 3,000 units SAAR. Multi-unit starts were up 29%, while singles were down by 37% in the region. Compared to the same time last year, new home construction was up by 270%.  

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Another good news report on the Canadian employment front. January reported an increase of 35,000 jobs (0.2%), adding to the increase reported in the previous month. This brought the national unemployment rate down from 5.6% in December to 5.5% in January.

Regionally, increases were primarily in Quebec (19,000), Manitoba (6,500) and New Brunswick (4,600). In contrast, employment was down in Alberta (-19,000). January's increase was entirely driven by full-time work with gains in manufacturing, construction and agriculture, while the services sector saw little change. Compared to the same month last year, Canadian employment is up by 1.4%.   

Meanwhile, employment in BC rose by 3,400 jobs (0.1%) in January, following last month's decline of 6,300 jobs. Part-time work was the main driver of the increase. By industry, employment gains were reported in just under half of the sub-sectors, led by manufacturing and trade. The provincial unemployment rate fell by 0.3 percentage points to 4.5%. Compared to one year ago, employment in BC is down by 0.1% (1,500) jobs.   


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The Canadian economy grew by 0.1% in November, offsetting most of the decline in October. Driving the increase were the construction industry (0.5%) and utilities (2.1%) where inclement weather in central Canada drove up demand (2.1%). 

There were gains in 15 of 20 industries, where retail trade recouped some of the loss reported in October, led by increases at auto dealers. Meanwhile, activity at stores typically associated with Black Friday were mixed. In contrast, decreases were reported in wholesale, transportation (due to an eight-day strike), and in the mining and oil sector (due to the temporary closure of a Potash mine). 

Activity at offices of real estate agents and brokers increased 1.3% in November, rising for the ninth consecutive month. The increase was due to higher housing resale activity in Montreal, Toronto and Vancouver.

We expect growth in the Canadian economy to slow down in the fourth quarter to 0.5% after posting moderate growth in the previous quarter. One factor to look out for is the transitory impact on growth of the coronavirus both in Canada and abroad. 

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The BCREA Nowcast estimate of provincial economic growth (expressed as year-over-year growth in real GDP) for November is 1.1 per cent, down from 1.5 per cent annual growth in October. That is the lowest estimated growth since December 2009. Estimated real GDP growth is being dragged lower by continued weakness in consumer spending and exports. Through eleven months of the year, we are tracking 2019 annual real GDP growth at 2.0 per cent.
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The Canadian economy grew by 0.1% in November, offsetting most of the decline in October. Driving the increase were the construction industry (0.5%) and utilities (2.1%) where inclement weather in central Canada drove up demand (2.1%). 

There were gains in 15 of 20 industries, where retail trade recouped some of the loss reported in October, led by increases at auto dealers. Meanwhile, activity at stores typically associated with Black Friday were mixed. In contrast, decreases were reported in wholesale, transportation (due to an eight-day strike), and in the mining and oil sector (due to the temporary closure of a Potash mine). 

Activity at offices of real estate agents and brokers increased 1.3% in November, rising for the ninth consecutive month. The increase was due to higher housing resale activity in Montreal, Toronto and Vancouver.

We expect growth in the Canadian economy to slow down in the fourth quarter to 0.5% after posting moderate growth in the previous quarter. One factor to look out for is the transitory impact on growth of the coronavirus both in Canada and abroad. 

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The Bank of Canada held its overnight rate at 1.75 per cent this morning. In the statement accompanying the decision the Bank noted that while economic growth slowed in the fourth quarter, the global economy appears to be stabilizing and export demand and business investment should pick-up over the next year.  In addition, strong population and income growth will provide a boost to consumer spending and the housing market continues to recover.  The Bank projects that inflation will stay around its 2 per cent target over the next two years.

Although the Canadian economy appears to have limped to the finish line in 2019, pressure on the Bank of Canada to lower rates may actually be easing as risks to the Global economy fade. Fear surrounding the outlook for the United States has subsided due to rate-cutting by the US Federal Reserve and guarded optimism around US-China trade relations.  With external risks to the outlook diminished, the Bank will likely remain focused on restraining the growth of household debt. Therefore, it is unlikely the Bank will opt to lower its policy rate this year, absent a significant deterioration in the outlook for Canadian growth and inflation.
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BCREA 2020 First Quarter Housing Forecast Update

Vancouver, BC – January 23, 2020. The British Columbia Real Estate Association (BCREA) released its 2020 First Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to increase 10.3 per cent to 85,290 units this year, after recording 77,349 residential sales in 2019. MLS® residential sales are forecast to increase 6.3 per cent to 90,700 units in 2021.

“The outlook for home sales in 2020 is considerably brighter than the past two years,” said Brendon Ogmundson, BCREA Chief Economist. “Momentum carried through from the end of 2019 to 2020 will put the housing market on more solid footing, aided by low interest rates and an improving economy.”

While demand is recovering, the supply of homes for sale has not managed to keep pace. New listings activity did not materially increase during the downturn in home sales, and total inventory did not accumulate to the same extent as in prior slowdowns. As a result, market conditions around the province are tightening and home prices will likely face upward pressure as demand continues to firm. In 2020, we expect the MLS® average price will rise 4.8 per cent to $734,000.

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Seasonally-adjusted Canadian retail sales rose by 0.9% in November to $51.5 billion, driven by higher sales at motor vehicle and parts dealers, and at food and beverage stores. This marks the strongest monthly increase since March 2019 (1.3%). Higher sales were reported in 6 of 11 sub-sectors, representing 70% of retail sales. 

Regionally, 6 of 10 provinces reported increases in November, led by Ontario (1.6%) and Quebec (1.4%). In contrast, retail sales in Alberta continue to trend downward (-0.9%).

In B.C., seasonally-adjusted retail sales rose by 1.1% to $7.2 billion in November, driven by increased sales at electronic, home furnishing and clothing stores. Vancouver also reported a monthly increase of 1.2% in sales. Compared to the same time last year, B.C. retail sales were up by 0.6% in November.


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Canadian housing starts decreased by 3.4% in December to 197,329 units at a seasonally adjusted annual rate (SAAR). The trend in national housing starts fell, averaging about 212,000 units SAAR over the past six months. 

In BC, housing starts fell by 10% on a monthly basis to 42,791 units SAAR, largely due to contractions in the volatile multi-unit segment in regions outside of Vancouver. Compared to the same time last year, provincial starts were down by 16%. The province ended 2019 with the highest level of housing starts since 1955, the year when data collection began. 

Looking at census metropolitan areas in BC: 

Housing starts in Vancouver were flat in December, following last month's 78% increase. Compared to last year in December, housing starts were up by 12%. In 2019, Vancouver reported record-level housing starts. 

In Victoria, housing starts were down by 23% on a monthly basis to 3,263 units SAAR. Compared to a year ago in December, housing starts were down by 66%. Overall, housing starts in Victoria slowed by 18% in 2019 when compared to last year. 

In Kelowna, housing starts decreased by 74% in December to 908 units SAAR. Year-over-year starts were down by 73% in the region. In 2019, housing starts were 12% lower than in 2018.

Monthly housing starts in Abbotsford-Mission were up by 54% at 2,517 units SAAR. Compared to the same time last year, new home construction was down by 28%. Abbotsford-Mission ended 2019 on a strong note with housing starts up by 61% compared to 2018. 

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A good news report. Canadian employment increased by 35,200 jobs in December, partially offsetting the previous month's decline of 71,200 jobs. This brought the national unemployment rate down from 5.9% in the previous month to 5.6% in December. Regionally, the increase was led by Ontario (25,000) and Quebec (21,000). December's increase was largely driven by full time work in the private-sector, which finally broke its losing streak. Most of the increase was in accommodation and food services (25,000) and in construction (17,000), while other industries saw little change. Compared to the same month last year, Canadian employment is up 1.7%.   

Not a great report. Employment in BC fell by 7,700 jobs in December, following last month's decline of 18,200. The decline was primarily driven by part-time employment (-6,500). By Industry, employment losses were generally broad-based, with the exception of construction, health care/social assistance, and accommodation and food services. The provincial unemployment rate fell by 0.2 percentage points to 4.8%. Compared to one year ago, employment in BC is up by 0.3% (7,100) jobs.   


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Vancouver, BC – January 13, 2020. The British Columbia Real Estate Association (BCREA) reports that a total of 77,331 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in 2019, a decline of 1.5 per cent from the 78,516 units sold in 2018. The annual average MLS®residential price in BC was $700,460, a decline of 1.6 per cent from $711,564 recorded the previous year. Total sales dollar volume was $54.2 billion, a 3 per cent decline from 2018. 

“Housing markets across the province staged a strong recovery in the second half of 2019,” said BCREA Chief Economist Brendon Ogmundson. “This sets up 2020 to be a much more typical year than what markets have experienced recently.”

A total of 5,218 MLS® residential unit sales were recorded across the province in December, up 48.9 per cent from December 2018. The average MLS® residential price in BC was $755,165, an increase of 8.7 per cent from December 2018. Total sales dollar volume was $3.9 billion, a 61.8 per cent increase year-over-year.

Total active residential listings were down 10.6 per cent to 24,691 units in December. Total inventory of homes for sale have declined more than 10 per cent on a year-over-year basis for two straight months.
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I have listed a new property at 377 1784 OSPREY DR in Tsawwassen.
This charming 3 bedroom, 2.5 bathroom sits on a quiet street in the Tsawwassen Shores Community. Entertain in this open floor plan for dining or relaxing with friends and family. A top quality chefs kitchen is a great space with full view of the main floor. The unit is bright and quiet, has 9' ceilings with lots of storage, 2 car private garage and upgrades including a built in vacuum system. Enjoy green space, parks, an oceanside boardwalk & trails, outdoor recreation, sports facilities and more in this master planned community! 5 minutes from BC Ferries, 20 minutes to YVR and walk to Tsawwassen Mills Shopping Center. A pleasure to show!
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Please visit our Open House at 601 7888 SABA RD in Richmond.
Open House on Sunday, January 5, 2020 2:30PM - 3:30PM
OPAL at Richmond Centre. Steps to shopping & Canada Line Station. 2 bdrms/study room+ 2 full baths, highly functional and efficient floor plan, wood flooring in living & dining room, granite counters, glass kitchen cabinets and stainless steel appliances. Huge balcony with city & mountain view.
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Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 2.2 per cent in November year-over-year, following a 1.9 per cent increase in the previous month. Excluding the impact of higher gasoline prices, national CPI rose by 2.3 per cent year-over-year. The Bank of Canada's three measures of trend inflation rose to average 2.2 per cent in November, which means the increase in prices have been relatively broad-based.

In B.C., CPI grew to 2.2 per cent year-over-year, matching growth in October. The rise was led by food, and clothing and footwear prices, while notable declines were reported in gasoline and recreation prices. 

Although the Bank of Canada has noted that inflation has been close to its target, the Bank will likely continue its cautious approach, as it continues to monitor other key economic indicators before deciding on a course of action in 2020.


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Please visit our Open House at 601 7888 SABA RD in Richmond.
Open House on Saturday, December 14, 2019 2:00PM - 4:00PM
OPAL at Richmond Centre. Steps to shopping & Canada Line Station. 2 bdrms/study room+ 2 full baths, highly functional and efficient floor plan, wood flooring in living & dining room, granite counters, glass kitchen cabinets and stainless steel appliances. Huge balcony with city & mountain view.
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Highlights

  • Wild year for interest rates
  • Canadian economy: slow and steady
  • Why is the Bank of Canada holding back?


Mortgage Rate Outlook
As the year ends, it's worth reflecting on how significantly the Canadian interest rate environment has changed in just twelve months. One year ago, the Canadian yield curve was its usual upward sloping shape, with markets expecting gradual rate increases by the Bank of Canada. Based partly on those expectations, Canadian mortgage rates were climbing. However, within 8 months the yield curve in Canada had inverted, bond yields tumbled, and Canadian mortgage rates were once again heading lower.

So, what happened? Most prominently, two of the worlds' largest economies entered a mutually destructive trade war, which has in turn slowed global economic growth and caused a sharp retracing of interest rate expectations. At its most fervent point, and informed by the yield curve's impressive recession forecasting record, the bond market panic pushed 5-year bond yields to just 1.13 per cent, and pulled the average 5-year mortgage contract rate well below 3 per cent and about 100 basis points below where rates ended 2018. However, by the end of summer the panic had subsided, aided by three rate cuts by the US Federal Reserve, and an otherwise occupied White House taking a step back from sabre-rattling on trade tariffs. As a result, 5-year Canadian bond yields bounced back to around 1.5 per cent and Canadian mortgage rates are now experiencing a small amount of upward pressure.

The outlook for where mortgage rates go from here is fairly clouded. While bond markets are no longer as shaken as they were six months ago, growth in the Canadian economy is still slightly below trend. Canadian monetary policy may also be tighter than necessary, given that the Bank's US counterparts have been lowering rates and global economic risk is elevated. However, those risks seem to be already priced into bond yields and absent a change in the stance of Canadian monetary policy, mortgage rates may be in for a dull year with rates remaining low and stable. Perhaps a welcome relief from the volatility of the past two years.

Economic Outlook 
The Canadian economy grew just 1.3 per cent in the fourth quarter of 2019, an expected slowdown after an abnormally strong second quarter saw real GDP growth of 3.7 per cent. The impact of elevated trade tensions is apparent in the data, with Canadian export and investment both negatively effected. Canadian exports have slowed in recent months and nonresidential investment contracted in the first half of the year.However, business sentiment outside of the energy sector has improved slightly and we have yet to see the impact on the trade sector leak into the wider economy through declining job growth or consumer spending. Household consumption spending should get a further boost as the housing market recovers and firmer price growth and lower interest rates spur increased borrowing against home equity.

Overall, we expect growth in the Canadian economy will finish 2019 at 1.6 per cent and will post trend growth of about 1.8 per cent in 2020.

Interest Rate Outlook 
With many central banks around the world lowering their policy rates, a key question is why is the Bank of Canada holding firm? The answer is simply that the Bank judges the potential of lower rates igniting a further accumulation of household debt as a greater risk to the Canadian economy than deteriorating global economic conditions. Canadian policymakers have committed to bending the curve on the Canadian household debt-to-income ratio, through a combination of higher interest rates and stricter mortgage policy.

Balanced against the goal of restraining debt, the Bank sees the risk of a further disruption in global trade as manageable. The outlook for Canadian economic growth is roughly in line with trend growth for the economy and inflation is expected to be tethered to its 2 per cent target. As long as that outlook holds, we expect the Bank will remain on the sidelines in 2020.

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Canadian housing starts decreased by 0.3% in November to 201,318 units at a seasonally adjusted annual rate (SAAR). The trend in national housing starts continues to be healthy, averaging about 219,000 units SAAR over the past six months. 

In BC, housing starts rose by 41% on a monthly basis to 48,840 units SAAR, largely due to a 59% increase in construction in the multi-unit segment in Vancouver, while single detached home construction was down by 13%. Compared to the same time last year, provincial starts were up by 22%.

Looking at census metropolitan areas in BC: 

Housing starts in Vancouver were up by 78% in November at 27,688 units SAAR, following last month's lowest reported level of starts in 2019. The increase was driven entirely by the multi-unit segment. Compared to last year in November, housing starts in Vancouver were up by 26%. 

In Victoria, housing starts were up by 9% on a monthly basis to 4,224 units SAAR. Compared to a year ago, housing starts were up by 44%.

In Kelowna, housing starts decreased by 9% in November to 3,504 units SAAR. Year-over-year starts were down by 18% in the region. 

Monthly housing starts in Abbotsford-Mission were down by 30% at 1,636 units SAAR. Compared to this time last year, new home construction was up by 154%.

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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.