Jeffrey Qián 錢 曄 // 778-238-2014 // info@jeffreyqian.com

Retail sales rose for the third consecutive month in July by 0.6% on a seasonally-adjusted basis, close to Statistic Canada's preliminary estimate of 0.7%. This marks a deceleration from the 23% rise in June and a 21% rise in May, as stores were reopening. Sales were up in 6 of 11 subsectors, led by higher sales at auto dealers and at gas stations. Excluding these two subsectors, retail sales declined by 1.2%. Compared to the same time last year, retail sales were up by 5%.    

Sales were up in five provinces in July, the most notable increases were in BC, Manitoba, and Alberta. In BC, seasonally-adjusted retail sales were up by 2.1% ($7.6 billion) and by 0.9% ($3.4 billion) in Vancouver. Retail sales were up in the majority of subsectors, except in electronics/appliances and at auto dealers.  

Growth in e-commerce sales continued to slow in July, up by 63% year-over-year, following a 71% rise in the previous month. The slowdown is a result of the expansion of the reopening of physical stores. In July, e-commerce sales totaled $2.8 billion, accounting for 4.8% of total retails sales, down from 5% in the previous month. This excludes Canadians purchasing from foreign e-commerce retailers.  
    
Early estimates provided by Statistics Canada for August suggest that retail sales increased by 1.1%. Overall, the recovery in retail sales has been V-shaped with pent-up demand largely dissipated. Government support programs and low interest rates will continue to support retail spending. However, elevated unemployment levels, uncertainty around the continuation of deferral programs, and rising COVID-19 cases could also pose challenges going forward. 


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Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.1% in August year-over-year, matching last month's increase. Excluding gasoline, the CPI rose by 0.6%. Prices rose in five of eight components year-over-year with notable increases in food, shelter, and personal care, while prices continued to fall for transportation, clothing and footwear, and recreation. The Bank of Canada's three measures of trend inflation rose by 0.1 percentage points, averaging 1.7% in August. 

Regionally, the CPI was positive in five provinces. In BC, CPI rose by 0.2% in August year-over-year, matching last month's increase. Prices continued to rise for alcohol/tobacco/cannabis, food, shelter, household furnishings, and personal care. The increase in personal care was mainly due to higher prices for haircuts. In contrast, downward price pressures were ongoing in recreation, gas, transportation, and clothing and footwear.

As some provinces begin to re-visit containment measures seen earlier in the pandemic, inflation is expected to continue to be weak. In this environment, the Bank of Canada will keep interest rates low. 


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The British Columbia Real Estate Association (BCREA) reports that a total of 10,172 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in August 2020, an increase of 42.8 per cent from August 2019. The average MLS® residential price in BC was $771,309, a 12.7 per cent increase from $684,093 recorded the previous year. Total sales dollar volume in August was $7.8 billion, a 61.1 per cent increase over 2019.

“Very strong provincial home sales continued in August,” said BCREA Chief Economist Brendon Ogmundson. “While pent-up demand from the spring is driving much of the increase, we anticipate a sustained strong level of sales through the fall.”

Total provincial active listings are still down more than 10 per cent year-over-year, with some markets even more under-supplied as the pandemic continues to keep listings low. As a result, prices are sharply rising around the province.

Year-to-date, BC residential sales dollar volume was up 15.8 per cent to $40.4 billion, compared with the same period in 2019. Residential unit sales were up 4.9 per cent to 53,336 units, while the average MLS® residential price was up 10.4 per cent to $757,504.  
 
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Canadian housing starts increased by 7% m/m to 262,396 units in August at a seasonally adjusted annual rate (SAAR). This represents the fourth consecutive monthly increase and the fastest pace of national homebuilding since 2007, pushing up the six-month average to 213,144 units SAAR. August's increase was driven primarily by the multi-units segment in Ontario, marking the province's strongest pace of homebuilding since 1990. 

In BC, housing starts increased by 6% m/m to 44,883 units SAAR in August, following an increase of 42,883 in July. The increase was primarily driven by the multi-unit segment. Housing starts in August were above the pre-COVID level. In the near term, we can expect housing activity to continue to be supported by sales that occurred prior to the pandemic and historically low borrowing rates. Meanwhile, the value of residential building permits was down sharply in July by 34%. Compared to the same time last year, housing starts were up by 23%.  

Looking at census metropolitan areas in BC: 

Housing starts in Vancouver were up by 22% m/m to 29,754 units SAAR in August. Both multi-units (25%) and singles (1%) were up. Compared to last year, housing starts were up by 50%, marking the first notable year-over-year increase in 2020.  

In Victoria, housing starts were down by 34% m/m to 2,732 units SAAR. Compared to a year ago in August, housing starts were up by 64%.  

In Kelowna, housing starts decreased by 24% m/m to 2,629 unit SAAR. Starts were down by 55% in the region compared to the same time last year. 

Monthly housing starts in Abbotsford-Mission were up by 195% at 1,431 units SAAR. Compared to the same time last year, new home construction was up by 27%.

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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, with large scale asset purchases of at least $5 billion per week in Government of Canada bonds. In the statement accompanying the decision, the Bank noted that the Canadian economy is evolving broadly in line with expectations, with a strong re-opening phase to be followed by slower, uneven growth and heavily reliant on policy support.  Inflation remains close to zero, with downward pressure from energy prices and travel services, and is expected to remain below the Bank's 2 per cent target for some time.  The Bank re-emphasized its commitment to keep its policy rate at its effective lower bound of 0.25 per cent until slack is absorbed in the economy and inflation stabilizes around its 2 per cent target. Its QE program will continue until a recovery is well underway. Given the Bank's' current projections, that means rates could be on hold until 2022.

A recovery in the housing market is well underway with sales in BC surpassing their pre-COVID-19 level.  With the Bank committing to holding its policy rate at 25 basis points 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, providing a significant boost to the BC housing market.
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The BCREA Commercial Leading Indicator (CLI) continued to fall in the second quarter of 2020 from 127.6 to 121.9, representing the fourth consecutive quarterly decline. It was the second largest drop in the indicator in over two decades, reflecting the hardest hit months of the pandemic in April and May. Compared to the same time last year, the index was down by 9.8 per cent.

The second quarter of 2020 saw the complete shutdown of key economic industries in BC, while employment continued to decline in manufacturing and in key real estate sectors. In contrast, the financial component had the largest positive impact on the CLI on record, as REIT prices rose and risk spreads narrowed from the previous quarter. The underlying trend in the CLI continued its downward trend into the second quarter of 2020. This suggests that going forward, the environment for commercial real estate activity in BC will continue to be weak.

BC’s economy was slowed by the pandemic in the first quarter of 2020, and by the second quarter came to a halt. Manufacturing sales of both durable and nondurable goods fell by magnitudes not seen since the great financial crisis in 2009. The decline in wholesale trade was driven by lower sales in motor vehicles, and to a lesser extent by lower sales in personal and household goods such as clothing and footwear. Meanwhile, April saw the largest monthly drop in retail sales on record, as brick-and-mortar stores were shut down for most of the second quarter. Although online sales reached new highs during this period, they were not enough to offset the decline.

Employment growth in key commercial real estate sectors such as finance, insurance, real estate and leasing was negative for the second consecutive quarter, down by about 1,700 jobs, which is notably fewer than the 13,500 jobs lost in the previous quarter. Manufacturing employment fell for the fourth consecutive quarter by about 5,170 jobs, almost three times the number of jobs lost in the previous quarter.

The CLI’s financial component was positive in the second quarter of 2020 as the market bounced back from the full meltdown in late February that sent equity markets into free fall and government bond yields plummeting.

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Canadian employment gained 246,000 jobs in August (1.4%, m/m), following a gain of 419,000 in July. Combined with gains in May and June, national employment is now within 1.1 million of its pre-COVID February level. The national unemployment rate fell by 0.7 percentage points to 10.2% from the previous month. August gains were driven by full-time work, wherein the previous month it was in part-time work. Employment continued to increase at a faster pace in the services sector with the help of growth in educational services, accommodation and food services, and in other services sectors. Compared to the same month last year, Canadian employment was down by 5.3% (-1 million). 

Regionally, employment increased in all provinces except in Alberta and in New Brunswick, with the largest gains in Ontario (142K) and Quebec (54K). In BC, employment grew by 15,000 (0.6%,m/m) in August, which follows a 70,000 gain in July. The province is now at 94% of its pre-COVID February employment level. The gain in August brought down BC's unemployment rate by 0.4 percentage points to 10.7%. Meanwhile, in Vancouver, employment decreased by 2,300 jobs in August. Compared to one year ago, employment in BC was down by 6.6% (-170K) jobs. 

Canadian employment grew for a fourth consecutive month, but the pace of growth is slowing. This was expected as containment restrictions were lifted in the early summer months, but have since halted in an effort to contain rising virus infections. Employment recovery is expected to continue to slow from here on, as many of the hardest-hit industries have reopened and educators start to return to school. 


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The Canadian economy contracted by 11.5 per cent from the first to the second quarter, or 38.9 per cent on a quarterly annualized basis, the steepest quarterly decline on record going back to 1961. Consumer spending fell 13.1 per cent as the start of the COVID-19 pandemic caused record job losses and prompted stores to close.  Business investment was down 16.2 per cent and exports fell 18.4 per cent as our trading partners dealt with the fallout of COVID-19 in their own economies.

The good news in an otherwise historically bad GDP report was that positive economic growth resumed with vigor following the record decline in April. The Canadian economy grew 4.8 per cent in May and 6.5 per cent in June, the highest monthly growth on record.  We are currently tracking third quarter real GDP growth at close to 8 per cent, or more than 30 per cent on a quarterly annualized basis. While that is a sharp and welcome rebound in economic activity, there is still quite a way to go before the Canadian economy is fully recovered. In fact, we do not expect real GDP to return to its pre-COVID-19 level until 2022.  That means that the current near-zero Bank of Canada policy rate and the resulting historically low 5-year fixed mortgage rates will be around for quite some time to come.

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The BCREA Economics team has created the COVID-19 Reopening Dashboard to help REALTORS® monitor the evolution of the BC economy as the province gradually reopens. 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 have more than fully recovered in BC and are now above pre-pandemic levels.

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 will be updated each month.


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The British Columbia Real Estate Association (BCREA) released its 2020 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to rise 6.5 per cent to 82,380 units this year, after recording 77,351 residential sales in 2019. MLS® residential sales are forecast to increase 17.6 per cent to 96,860 units in 2021.  

“The outlook for the BC housing market is much brighter following a surprisingly strong recovery,” said Brendon Ogmundson, BCREA Chief Economist. “We expect home sales will sustain this momentum into 2021, aided by record-low mortgage rates and a recovering economy.”  

With home sales more than fully recovered and now above pre-COVID-19 levels, combined with a decline in the supply of re-sale listings driven by the pandemic, many markets are now seeing sharply rising average prices despite a weak provincial economy. We are forecasting the provincial MLS® average price to finish the year up 7.7 per cent and to increase a further 3.7 per cent in 2021.

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Another good news report. Retail sales were up for a second consecutive month in June by 24% on a seasonally-adjusted basis, this follows a 21% rise in May. Sales were up in all subsectors, with growth primarily led by motor vehicle and parts dealers, as well as clothing. Retail sales in June were 1.3% higher than pre-pandemic levels in February. The June report puts second quarter retail sales at 13% below the first quarter report.    

Sales were up in all provinces in June, the most notable increases were in Ontario (34%), Quebec (24%), Nova Scotia (23%) and Alberta (19%). In BC, seasonally-adjusted retail sales were up by 13% ($7.4 billion) and by 18% ($3.4 billion) in Vancouver. Retail sales were up in the majority of subsectors in BC, with the largest gains reported in motor vehicle and parts dealers, and at clothing stores. This comes on the heels of pent-up demand following closures at dealerships and at brick and mortar stores during the spring months. 

Growth in e-commerce sales slowed in June, up by 71% year-over-year, following a 113% rise in the previous month. In June, e-commerce sales totaled $3.2 billion, accounting for 5% of total retails sales, down from 8% in May. This excludes Canadians purchasing from foreign e-commerce retailers.  
    
Advance estimates provided by Statistics Canada for July suggest that retail sales increased by 0.7%. There has been some concern over what would happen once government support programs ended, but the federal government's announcement yesterday on extending CERB for another four weeks, and the transition to a restructured EI program has helped to lessen this concern, for now.


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Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.1% in July year-over-year, down from a 0.7% rise in the previous month. Excluding gasoline, the CPI rose by 0.7%. Inflation grew at a slower pace than in June due to a broad-based slowdown in price growth. Prices rose in five of eight components year-over-year, while prices fell for air transportation (-8.6%) and accommodations (-27%). This is the first year-over-year price decline in the transportation component since December 2015. Meanwhile, the Bank of Canada's three measures of trend inflation fell by 0.1 percentage points, averaging 1.6% in July. 

Regionally, the CPI was positive in five provinces. In BC, CPI rose by 0.2% year-over-year, following a 0.5% rise in June. Prices for food, alcohol/tobacco/cannabis, and health and personal care continued to rise in July, while downward pressure on gas prices eased up as people were using their vechicles more.

The impact of COVID-19 on some of the hard hit components are beginning to dissipate, excluding the transportation and accommodation sectors, which usually see a rise in the summer months. The path of inflation going forward will be a constant tension between various incentives such as reduced fees, discounts and promotions, against lower revenues due to physical distancing measures.

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The British Columbia Real Estate Association (BCREA) reports that a total of 10,090 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in July 2020, an increase of 26.6 per cent from July 2019. The average MLS® residential price in BC was $770,810, a 12.9 per cent increase from $682,702 recorded the previous year. Total sales dollar volume in July was $7.8 billion, a 43 per cent increase over 2019. 

“The strong recovery in sales activity continued in July,” said BCREA Chief Economist Brendon Ogmundson. “Increased demand for more living space combined with an undersupplied market is producing significant upward pressure on home prices, particularly in the market for single-family homes.”

Active listings remain down significantly year-over-year, creating upward pressure on prices, though increased demand for single-family homes has somewhat skewed average prices in some markets.


Year-to-date, BC residential sales dollar volume was up 8.4 per cent to $32.5 billion, compared with the same period in 2019. Residential unit sales were down 1.4 per cent to 43,718 units, while the average MLS® residential price was up 10 per cent to $754,842.   
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Canadian housing starts increased by 16% m/m to 245,604 units in July at a seasonally adjusted annual rate (SAAR), which was well above pre-COVID levels . This brought up the national housing starts six month average to 204,376 units SAAR. Housing starts were up across the country with notable growth in the Prairies and Atlantic Canada.  

In BC, housing starts was up 9% m/m to 42,381 units SAAR in July, following an increase of 38,840 in June. The increase was primarily driven by the multi-unit segment. Housing starts in July are back at pre-COVID levels. That being said, housing starts in the province showed resilience during the height of the pandemic when restrictions were the tightest. In the near term, we can expect housing activity to continue to be supported by pent-up demand and historically low borrowing rates. Compared to the same time last year, housing starts are down by 16%. Meanwhile, the value of residential building permits for June was up by 20% in the province.  

Looking at census metropolitan areas in BC: 

Housing starts in Vancouver were up by 4% m/m in July to 24,395 units SAAR. Multi-units were up by 5%, while singles were down by 4%. Compared to last year in July, housing starts were down by 23%, which marks the fourth consecutive month of negative year-over-year growth.  

In Victoria, housing starts were up by 77% m/m to 4,161 units SAAR. Compared to a year ago in July, housing starts were up by 14%.  

In Kelowna, housing starts increased by 21% m/m to 3,457 unit SAAR. Starts were up by 138% in the region compared to the same time last year. 

Monthly housing starts in Abbotsford-Mission were down by 18% at 479 units SAAR. Compared to the same time last year, new home construction was down by 84%.

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Canadian employment grew by 419,000 jobs in July (2.4%, m/m). Combined with gains in May of 290,000 and gains in June of 953,000, this brought national employment to within 1.3 million of the pre-COVID February level. The national unemployment rate fell by 1.4 percentage points to 10.9 per cent from the previous month. Most of the employment gains in July were in part-time work. Compared to the same month last year, Canadian employment was down by 6.3% (-1.2 million). 

Regionally, all provinces reported an increase in employment except New Brunswick, where employment was little changed. The strongest gains were in Ontario which were almost all in part-time work, reflecting the later easing of COVID-related measures compared with other provinces. In July, employment continued to rise faster among women than men, but on a cumulative basis, men are closer to being back at pre-COVID levels than women. 

To address gaps in the understanding of the impact of the pandemic on certain visible communities, Statistics Canada has enhanced their employment survey. Of note, Statistics Canada found that compared to the same time last year, South Asians and Chinese Canadians experienced the highest increases in unemployment related to the pandemic, in part attributable to their greater concentration in some of the industries hardest hit by COVID-19 restrictions. Meanwhile, unemployment rates were lower for Black Canadians and Filipino Canadians, where many work in health care and social assistance industries. 

Employment in BC grew by 70,000 jobs (3%, m/m) in July, reaching almost 94% of the February employment level. This followed job gains of 118,100 in June and 43,000 in May. July's employment gain brought down the unemployment rate by 1.9 percentage points to 11 per cent. In Vancouver, employment increased by 48,000 jobs to reach almost 90% of the February level. Compared to one year ago, employment in BC was down by 7.5% (-192,000) jobs. 

This was another good news report. However, gains in July were lower than in June, reflecting reopening measures that began in June where employment growth was coming back from very low levels. We can expect that recovery will be slower from here on, as many of the hardest hit industries have reopened and will continue to maintain physical distancing measures. Also important are consumers' demand for goods and services, which is expected to be hampered by the still 165,000 unemployed individuals in BC since February, and the winding down of government support programs. 


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Canadian real GDP grew 4.5  per cent on a monthly basis in May. May's increase follows an 11.6 per cent contraction in April, the largest monthly decline in GDP since the series started to be recorded in 1961. Despite the rise in GDP in May the Canadian economy is still 15 per cent below its February, pre-COVID-19 level. Statistics Canada's preliminary estimate for second quarter GDP is a decline of 12 per cent from the first quarter, or an annualized decline of close to 50%.

With an increase in GDP in May and a preliminary estimate of 5 per cent growth in June, it would appear that the Canadian economy is recovering from the COVID-19 induced recession. That recovery is already well underway in BC housing markets, with home sales recovering pre-COVID-19 levels in early summer.
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Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.7% in June year-over-year, up from a 0.4% decline in May. June saw the fastest rise in the CPI since March 2011. Prices rose in five of eight components year-over-year, with food and shelter prices driving the increase. Rents rebounded in June, rising 0.6% from the previous month, coinciding with the easing of some pandemic related restrictions and the warmer summer months. Mortgage interest costs continued to fall in June due to declining bond yields and the Bank of Canada's low policy rate set in March. Meanwhile, the Bank of Canada's three measures of trend inflation rose by 0.1 percentage points, averaging 1.7% in June. 

Regionally, the CPI was positive in all provinces except for Prince Edward Island. In BC, CPI rose by 0.5%, following a 0.2% decline in May year-over-year. Prices for food, alcohol/tobacco/cannabis, and health and personal care continued to rise in June, while downward pressure on gas prices eased up as reopening measures had people using their vehicles more.

Prices for the hardest hit components are beginning to recover, but the rising numbers in COVID-19 cases in Canada and in the US, and the high unemployment rate will likely keep price pressures stunted. This will also likely leave the Bank of Canada's policy rate low.


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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.