BC Home Sales Post Strongest October in Four Years

Vancouver, BC – November 15, 2013.  The British Columbia Real

Estate Association (BCREA) reports that a total of 6,673 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during October, up 26.5 per cent from October 2012. Total sales dollar volume was 34.5 per cent higher than a year ago at $3.6 billion. The average MLS® residential price in the province was $540,432, up 6.3 per cent from October 2012.

"The fall housing market is shaping up to be the most active in four years,” said Cameron Muir, BCREA Chief Economist. “Persistently low mortgage interest rates and an element of pent-up demand have driven home sales higher in the province’s large Lower Mainland and Vancouver Island markets."

"While the rebound in consumer demand has been significant, home sales are trending near the long-term average and any continued acceleration will depend on stronger economic and employment growth,” added Muir.

Year-to-date, BC residential sales dollar volume was up 8.2 per cent to $33.6 billion, compared to the same period last year. Residential unit sales were up 5.1 per cent to 63,020 units, while the average MLS® residential price was up 2.9 per cent at $533,321.

Canadian Employment and Housing Starts - November 8, 2013

BCREA ECONOMICS NOW


Employment

Canadian employment expanded by 13,200 jobs in October, and the total number of employed rose 1.3 per cent compared to October of last year. The unemployment rate remained unchanged at 6.9 per cent. 

In BC, employment again fell, with firms shedding over 5,000 jobs for a second consecutive month. In spite of job losses, the provincial unemployment rate actually declined 0.2 points to 6.5 per cent due to a sharp drop in those looking for work. Year-to-date, employment  in BC has declined 0.1 per cent. 


Housing Starts

Canadian housing starts increased 1.2 per cent in September to 198,282 units at a seasonally adjusted annual rate (SAAR).  The trend in Canadian new home construction rose as well, to 195,338 units SAAR over the past six months, a rate that is slightly higher than demographic demand suggests is needed.  On a year-over-year basis, housing starts were down 5.4 per cent. 

New home construction in BC urban centres declined in October, falling 19.2 per cent to 23,918 units SAAR . On a year-over-year basis, total starts were 9 per cent lower than October 2012. Single-detached starts were up 15 per cent over last year, while multiple starts fell 18 per cent. Year-to-date, total BC housing starts are down 5 per cent.

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA fell 13 per cent year-over-year at 1,533 units.  Single family starts increased 32 per cent while multiples fell 22 per cent. In the Victoria CMA, total starts continued to be somewhat volatile, falling 28 per cent year-over-year  on the heels of a 40 per cent increase in September. New home construction in the Kelowna CMA jumped 87 per cent year-over-year in October due to a sizable increase in multi unit starts.  In the Abbotsford-MIssion CMA, starts were down 29 per cent year-over-year. 

US Q3 Real GDP Growth - November 7, 2013

BCREA ECONOMICS NOW

The preliminary estimate of Q3 US GDP came in at 2.8 per cent, resoundingly beating the consensus expectation of 1.9 per cent.  However, a full 0.8 per cent of that growth was due to a build-up of inventories and this report may be noisier than usual due to the government shutdown. It is worth noting that today's release is a preliminary estimate and will be revised in subsequent months. 

Stronger than expected economic growth in the United States, coupled with a decent jobs report tomorrow, could put some upward pressure on long-term bond yields, which have fallen significantly since the Fed opted to delay its quantitative easing program. Even so, we anticipate that long-term rates and therefore mortgage rates, will remain stable through the end of the year. 

Canadian building permits

Canadian building permits rose 1.7 per cent in September to $6.5 billion, following a 20 per cent decline in August.  The modest increase in building permits was led by the residential sector, primarily in Alberta and Quebec. 

Construction intentions in BC declined 6 per cent in September from August and were nearly 19 per cent lower year-over-year. The value of residential permits were 14.1 per cent lower in September and 6 per cent lower year-over-year.  The total number of residential units permitted in September fell 29 per cent from August due to a sharp decline in permits for multiple units. The value of non-residential permits rose 10.3 per in September.  

Building permit activity across BC's four major census metropolitan areas (CMA) was mostly lower in September. In the Abbotsford-Mission CMA, permits rose 15.2 per cent on a monthly basis but were 61.7 per cent lower year-over-year. Construction intentions in the Victoria CMA declined for the second consecutive month, falling 2.5 per cent from August and 31.4 per cent year-over-year. In the Kelowna CMA, permits fell 52.8 per cent after posting a 70 per cent increase in August.  Finally, in the Vancouver CMA  building permits declined 11.3 per cent month-over-month and 29.2 per cent year-over-year.