Canadian Economic Growth (Q3)

The Canadian economy posted a better than expected 2.8 per cent growth the third quarter of 2014, on the heels of even stronger 3.6 per cent growth in the second quarter. Economic growth was largely driven by residential investment which grew at its fastest pace since early 2012 as well as healthy gains in household consumption and exports.

The Canadian economy is on track to expand 2.4 per cent in 2014, a marked improvement on 2 per cent growth in 2013 and above what the Bank of Canada considers the economy's potential rate of growth (beyond which, inflation may trend upward).  We expect the economy to grow about 2.3 per cent in 2015, which should further reign in slack in the economy. The recent sharp decline in energy prices may trim economic growth, but it will also take the wind out of inflation next year. Overall, improving economic growth and modest inflation pressure is consistent with the Bank of Canada raising its target rate next year. 

Copyright BCREA- reprinted with permission 

8. Home Buying: Defining The Financial Terms

Canadian Retail Sales

Canadian retail sales rose 0.8 per cent in September, propelled by higher motor vehicle sales. Excluding motor vehicles, retail sales were essentially flat.  Sales were higher in 5 of 11 retail sub-sectors.   In BC, retail sales were up 0.5 per cent on a monthly basis, and were 5.7 per cent higher compared to one year ago. Through the first nine months of the year, retail sales in BC are up a robust 5.7 per cent, which if sustained would mark the fastest rate of sales growth since 2007. 

With the release of September retail sales data we have a fairly complete picture of growth for the third quarter. Our tracking estimate puts Canadian real GDP growth for the third quarter at a healthy 2.2 per cent, though a deceleration from 3.1 per cent in the second quarter. Growth in the BC economy is currently tracking at 2.3 per cent through September.

Copyright BCREA-reprinted with permission 

Canadian Consumer Price Inflation

Canadian consumer prices rose 2.4 per cent in the 12 months to October, an acceleration of 0.4 points from September. The Bank of Canada's core measure of inflation, which excludes the most volatile prices such as energy and food products, was also higher, rising 0.2 points to  2.3 per cent. Consumer prices in BC rose actually fell on a month-over-month basis, but were up a modest 1.1 per cent year-over-year.

The relatively sharp uptick in both headline CPI and core inflation in October could spark some concern that the Bank of Canada will act sooner than later on interest rates to tame consumer prices. While strong economic growth and a lower dollar are exerting pressure on consumer prices, inflation remains within the Bank's 2 to 3 per cent control range and we therefore expect the Bank to remain on hold until at least mid-2015, 

Copyright BCREA - reprinted with permission 

7. Home Buying: Defining The Financial Terms

6. Home Buying: Defining The Financial Terms

U.S. Housing Starts

Housing starts in the United States fell 2.8 per cent in October to a seasonally adjusted annual rate (SAAR) of 1.009 million units. However, that level was 7.8 per cent higher than October 2013. After a somewhat slow start, new home construction in the US has been trending higher for much of the second half of 2014. Housing starts have registered a more than 1 million unit SAAR pace for 2 consecutive months and in 3 of the past four months. Overall, housing starts are 9.6 per cent higher year-to-date. 

The recovery in the US housing market has been the primary driver of  BC's resurgent forest products industry. Moreover, a healthy residential construction industry in the US is helping put the overall US economy on stronger footing.  Moreover, robust growth in the US over the past two quarters has helped lift BC exports in 2014 in spite of flagging performance in the global economy. 

Copyright BCREA - reprinted with permission 

Housing Demand Ratchets Higher in B.C.

BCREA 2014 Fourth Quarter Housinf Forecast 

The British Columbia Real Estate Association (BCREA) released its 2014 Fourth Quarter Housing Forecast today.

"Consumer demand has ratcheted up this year and is expected to remain at a more elevated level through 2015,” said Cameron Muir, BCREA Chief Economist. “While historically low mortgage rates support demand, the housing market is also being underpinned by a more robust economy and associated job growth, strong net migration and consumer confidence."

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 15.1 per cent to 83,900 units this year. Stronger economic conditions are expected to be somewhat offset by higher interest rates later next year, and keep home sales from advancing much further. As a result, MLS® residential sales are forecast to edge up a further 1.2 per cent to 84,900 units in 2015. The 15-year average is 80,400 unit sales and a record 106,300 MLS® residential sales were recorded in 2005.  

The average MLS® residential price for the province is forecast to increase 6 per cent to a record $569,800 this year and a further 1.2 per cent to $574,300 in 2015. “New construction activity is generally keeping pace with population and household growth, keeping supply in line with consumer demand,” added Muir. BC housing starts are forecast to increase 4.6 per cent to 28,300 units this year and a further 1.4 per cent to 28,700 units in 2015.

Copyright BCREA - reprinted with permission 

5. Home Buying: Defining The Financial Terms

CREA Housing Market Report 10th ed. 2014 / Rapport sur le marché du loge...

4. Home Buying: Defining The Financial Terms

3. Home Buying: Defining The Financial Terms

2. Home Buying: Defining The Financial Terms

1. Home Buying: Defining The Financial Terms

BCREA Housing Market Update (November 2014)

Canadian Manufacturing Sales

Canadian manufacturing sales rebounded from a poor showing in August, rising 2.1 per cent in September to $53 billion. The increase in sales was the eighth gain in the past nine months and was primarily the result of higher sales of transportation equipment. 

In BC, where manufacturing employs over 160,000 people,  manufacturing sales were up 1.9 cent on a monthly basis, and were 9 per cent higher year-over-year.  Through the first nine months of the year, manufacturing sales are close to 7 per cent higher than last year. 

Copyright BCREA - reprinted with permission 

Year-to-Date Home Sales Eclipse 2013 Annual Total

The British Columbia Real Estate Association (BCREA) reports that a total of 7,648 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in October, up 14.6 per cent from October 2013. Total sales dollar volume was $4.4 billion, an increase of 22 per cent compared to a year ago. The average MLS® residential price in the province rose to $575,504, up 7.1 per cent from the same month last year.

“Consumer demand for housing continues at an elevated level,” said Cameron Muir, BCREA Chief Economist. “There were more homes purchased during the first ten months of the year than during all of 2013”. To the end of October, 73,001 homes have traded hands in the province compared to 72,936 for all of last year."

“Strong year-over-year increases in housing demand were experienced in Chilliwack (up 31 per cent), Victoria (up 21.9 per cent) and the Kootenay (up 19.4 per cent) market areas. Vancouver, Vancouver Island, the Fraser Valley and Okanagan Mainline also posted a marked increase in sales activity last month."

Year-to-date, BC residential sales dollar volume was up 23 per cent to $41.4 billion, compared to the same period last year. Residential unit sales were up 15.8 per cent to 73,001 units, while the average MLS® residential price was up 6.2 per cent at $566,687.

Copyright BCREA - reprinted with permission 

Best Rate Mortgages

This edition of the Weekly Rate Minder has the latest, best rates for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the mortgage that suits your needs. Best of all — our service is free.* It's the selected lender that pays us and YOU get the best rate. *(O.A.C., E.&O.E.) • Our Best National Rates

Terms Bank Rates Our Rates 6 Month 4.00% 3.95% 1 YEAR 3.09% 2.69% 2 YEARS 3.04% 2.59% 3 YEARS 3.44% 2.69% 4 YEARS 3.94% 2.87% 5 YEARS 4.79% 2.89% 7 YEARS 6.04% 3.79% 10 YEARS 6.50% 4.39% Rates are subject to change without notice. *OAC E&OE

Prime Rate is 3.00%  Variable rate mortgages from as low as Prime minus 0.65%  Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.” Check with your Dominion Lending Centres Mortgage Professional for full details and to determine what rate will be available for you. *O.A.C., E.& O.E.

CREA Housing Market Report 9th ed. 2014 /

BCREA Housing Market Update (October 2014)

CREA Housing Market Report 8th ed. 2014 / Rapport sur le marché du logem...

Canadian and US Employment

 October was another big month for job growth as the Canadian economy added 43,000 jobs. The national unemployment rate dropped 0.3 points to 6.5 per cent, the lowest rate since November 2008. Total hours worked, which is closely associated with economic growth, rose 0.4 per cent.

In BC, employment grew by 4,600 jobs in October. Full-time employment expanded by 6,600 jobs while part-time employment fell by 2,000. The provincial unemployment rate remained unchanged at 6.1 per cent. Year-to-date, total employment in BC is up just 0.7 per cent.

The US economy added 214,000 jobs in October while estimates of previous months job growth was revised higher by 30,000 jobs. Over the past 3 month, US payroll growth has averaged a healthy 233,000 jobs.  The US unemployment rate fell to 5.8 per cent, the lowest level since July 2008. 

Copyright BCREA-reprinted with permission 

 

Canadian Building Permits

The value of Canadian building permits increased 12.7 per cent in September, rebounding from a steep decline in the previous month. 

Building permits also rebounded in BC, rising 9.8 per cent on a monthly basis and 3.8 per cent year-over-year to $879.4 million. Both non-residential and residential permits were higher in September, but growth was primarily the result of a 12.1 per cent increase in residential permits.

Construction intentions were mixed in BC's four census metropolitan areas (CMA). Permits in the Abbotsford-Mission CMA posted a second consecutive month of steep declines, falling 45.7 per cent on a monthly basis, and 37.4 per cent compared to September 2013.  Construction intentions in the Kelowna CMA were also lower, with permits dipping 14.1 per cent from August, but were 12.5 per cent higher year-over-year.  In the Victoria CMA, permit activity increased 15.8 per cent on a monthly basis and was up 24.9 per cent year-over-year. In the Vancouver CMA, permits were up 8.5per cent on a monthly basis and were 1 per cent higher year-over-year.

Copyright BCREA-reprinted with permission 

Canadian Monthly GDP (August)

Halloween brought a ghastly GDP report for August. The Canadian economy contracted 0.1 per cent in August following an  essentially flat July. Declines at the industry level were led by manufacturing, and oil and gas extraction.

Based on the first two months of GDP data for the third quarter, we would estimate that the Canadian economy grew a modest 2 per cent from July to September. That would mark a significant slowdown from second quarter growth of 3.2 per cent and provides additional cover for the Bank of Canada to keep rates unchanged for a considerable amount of time.

Copyright BCREA-reprinted with permission