The British Columbia Real Estate Association (BCREA) reports that a total of 6,960 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in June, a decline of 11.8 per cent from the same month last year. The average MLS® residential price in the province was $687,584, a decline of 4 per cent from June 2018. Total sales dollar volume was $4.8 billion, a 15.3 per cent decline from the same month last year.
“BC home sales moderated lower in June after a stronger showing in May,” said BCREA Deputy Chief Economist Brendon Ogmundson. “While mortgage rates offered by lenders have moved below 3 per cent, a static qualifying rate has limited the impact of the lower cost of borrowing.”
Total MLS® residential active listings were up 18.6 per cent to 42,625 units compared to the same month last year and were essentially flat on a seasonally adjusted basis compared to May.
Year-to-date, BC residential sales dollar volume was down 23.4 per cent to $24.5 billion, compared with the same period in 2018. Residential unit sales decreased 18.7 per cent to 35,679 units, while the average MLS® residential price was down 5.8 per cent to $688,080..
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.
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.
The British Columbia Real Estate Association (BCREA) reports that a total of 8,221 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, a decline of 7 per cent from the same month last year. The average MLS® residential price in the province was $707,829, a decline of 4.3 per cent from May 2018. Total sales dollar volume was $5.8 billion, an 11 per cent decline from the same month last year.
“BC home sales increased 9 per cent in May compared to April, on a seasonally adjusted basis,” said BCREA Chief Economist Cameron Muir. “However, consumers continue to struggle with the negative shock to affordability that stringent mortgage lending policies have created.”
Total MLS® residential active listings were up 23.2 per cent to 41,519 units compared to the same month last year. However, total active listings were down 2 per cent from April, on a seasonally adjusted basis, the first monthly decline since the B20 Stress test was introduced in January 2018.
Year-to-date, BC residential sales dollar volume was down 25.1 per cent to $19.8 billion, compared with the same period in 2018. Residential unit sales decreased 20.2 per cent to 28,711 units, while the average MLS® residential price was down 6.2 per cent to $688,339.
Canadian housing starts decreased by 13 per cent on a monthly basis in May to 202,337 units at a seasonally adjusted annual rate (SAAR). This decline follows a strong rebound reported in the previous month. The trend in Canadian housing starts was down, averaging 202,000 units SAAR over the past six months, which is still a robust trend.
In BC, total housing starts were up 8 per cent on a monthly basis to 53,352 units SAAR. Total starts were up 31 per cent compared to May of last year. On a monthly basis, starts of multiple units were up 12 per cent to46,020 units SAAR, while single detached starts fell by 11 per cent to 7,332 units SAAR.
Looking at census metropolitan areas in BC:
Total starts in Vancouver were up 25 per cent on a monthly basis in May at 42,667 units SAAR, as multiple unit starts rose by 29 per cent from the previous month. Compared to last year in May, housing starts in Vancouver were up 60 per cent.
In Victoria, housing starts were down by 57 per cent on a monthly basis to 2,311 units SAAR, mostly due to a decline from last month's spike in multiple unit starts. Compared to a year ago, housing starts are down 28 per cent.
The BCREA Commercial Leading Indicator (CLI) rose by 1.3 points to 135.2 in the first quarter of 2019. Compared to this time one year ago, the index is 1.1 per cent higher.
“While economic activity remained tepid at the start of 2019, a rebound in financial markets pushed the CLI higher,” says BCREA Deputy Chief Economist Brendon Ogmundson. “That signals a lower risk environment, but a slowing economy may impact future commercial real estate activity.”
Following several years of robust growth, the BC economy continues to slow in the early part of 2019. The economic activity component of the CLI posted a third consecutive quarterly decline. Employment in key commercial real estate sectors was mixed. The CLI measure of office employment now sits at an all-time high, which signals strong future demand for office space. Volatile financial markets led to recent swings in the underlying CLI index, but the trend remains flat, pointing to stable commercial activity in 2019.