This month’s COVID-19 Recovery Dashboard shows that near-record sales in Metro Vancouver, combined with unprecedented housing demand outside of Metro Vancouver, continued to drive a blistering pace of home sales in BC. Employment in retail and recreation are showing signs of recovery, but employment in accommodations and food services remains weak. Meanwhile, the number of people employed in high-wage positions continues to increase, supporting housing demand. Retail is starting to pick up again after a slow end to 2020. As the rollout of the vaccine accelerates, we can expect pent-up spending throughout the economy to be unleashed, driving a strong economic recovery. For a more comprehensive
Canadian retail sales fell in January by 1.1% m/m on a seasonally-adjusted basis. This is the second consecutive monthly decline since April 2020. Sales were down in 6 of 11 subsectors, representing 39% of retail sales. Clothing and clothing accessories stores led the decline, down for a fourth consecutive month. Notable declines were also reported at furniture and home furnishing stores. Compared to the same time last year, retail sales were up by 1.3%.
Sales were down mainly in Quebec and Ontario, where stricter lockdown measures were in place. In BC, seasonally-adjusted retail sales rose by 4.4% m/m ($8.4 billion) and by 4.4% m/m ($3.7 billion) in Vancouver. On a non-seasonally
Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 1.1% in February year-over-year. The increase was again due to higher gasoline prices (5%). Excluding the volatile gasoline component, the CPI rose by 1%, which is down from 1.3% in January. Prices rose in all components of the CPI except for clothing and footwear. Growth in the Bank of Canada's three measures of trend inflation remained unchanged, averaging 1.7%.
Regionally, the CPI was positive in all provinces, led by Quebec (1.6%). In BC, CPI rose by 0.9% in February year-over-year, down from January's 1.1%. Strong price growth continued for health and personal care, shelter, and food. Transportation costs
There were 417 single family homes sales in the Vancouver Island Real Estate Board (VIREB) area in February 2021, which was 56% more sales than February 2020. Condo sales for the month hit a whopping 132% increase compared to the same month last year with 130 sales. Townhomes hit 81 sales which was a 42% increase year over year.
The volume of sales spread across these different segments is closely related to the inventory of each property type. While single family dwelling (SFD) sales still likely have the highest level of demand behind it, the severely limited availability of SFD’s is keeping the year-over-year volume increases under the condo segment. There was a 6% decrease in SFD inventory from Jan 2021 to Feb 2021 to hit 394 available listings.
The Victoria real estate market continued on-trend with 33% more sales in February compared to the first month of 2021. Single-family homes were up 43.9% in February 2021 compared to the same month last year at 390 sales. Condos hit 290 unit sales and was 65.7% up year over year. Total sales year over year including single-family, condo and townhomes were up 53.3%.
With a prolonged restricted inventory and unusually high demand we have started to see upward pressure on price, especially in the single-family dwelling (SFD) market but being closely followed in the condo segment as SFD availability can’t accommodate all the prospective buyers. As properties start going in multiples, many homeowners are seriously considering selling. This is
Bank of Canada Interest Rate Announcement - March 10, 2021
The Bank of Canada maintained its overnight rate at 0.25 percent this morning, a level it considers it's effective lower bound. The Bank reiterated what it calls "extraordinary forward guidance" in committing to leaving the overnight rate at 0.25 percent until slack in the economy is absorbed and inflation sustainably returns to its 2 percent target. The Bank projects that will not occur until 2023. The Bank is also continuing its quantitative easing (QE) program, purchasing at least $4 billion of Government of Canada bonds per week. In the statement accompanying the decision, the bank noted that while the near-term outlook for growth is strong, there remains considerable slack in the
Canadian Real GDP Growth (Q4'2020) - March 2, 2021
The Canadian economy expanded at a 9.6 percent annual rate in the fourth quarter of 2020. Growth was led by increased government spending, business investment, and investment in new home construction and renovations as well as a large change in business inventories as large drawdowns of inventory from previous quarters reversed. For 2020 as a whole, the Canadian economy shrank 5.4 percent, the steepest decline since quarterly GDP data were first recorded in 1961. Interestingly, the household savings rate registered 12.7 percent, the third consecutive quarter of double-digit saving rate. Remarkably, total household savings in 2020 matched the cumulative savings of the previous seven years
The BCREA Commercial Leading Indicator (CLI) reached a new high since the start of the series in 1999. The CLI rose from 139 to 144 in the fourth quarter of 2020, representing the second consecutive increase after four consecutive quarterly declines. Compared to the same time last year, the index was up by 5 percent.
Although the CLI is responding to a sharp rebound in economic, financial, and employment conditions, there is more here than meets the eye. Growth in these conditions would normally imply an improvement in demand for retail and office space. However, the complexities of the COVID-19 pandemic and related public health restrictions are driving a wedge between what we see in the
BC Monthly Real GDP Estimate for December 2020 & Preliminary Estimate for January 2021 (Updated: March 2, 2021)
The BCREA Nowcast estimate of provincial economic growth (expressed as year-over-year growth in real GDP) for December is 0.3 percent. For comparison, output in the Canadian economy was almost 3 percent lower year-over-year in December. The preliminary estimate for January 2021 year-over-year growth is 0.5 percent. We estimate that the BC economy contracted at a 5 percent rate in 2020, while the Canadian economy shrank by 5.4 percent.
This month’s COVID-19 Recovery Dashboard shows that home sales once again set a record. While sales were strong across the province, the Fraser Valley, Thompson Okanagan, and Vancouver Island regions shattered previous sales records and pushed January sales to new heights. The rise in COVID-19 cases and enhanced health restrictions have slowed employment recovery in select sectors, particularly in hospitality. Meanwhile, the number of people employed in higher-wage positions continues to increase, encouraging housing demand. Manufacturing and trade are back to pre-pandemic levels, which bodes well for BC's economic growth going forward. For a more comprehensive overview of BC's economic recovery, click here.
