Kootenay Connector Real Estate Blog

Tuesday, November 25, 2014

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.

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,

7. Home Buying: Defining The Financial Terms

6. Home Buying: Defining The Financial Terms

Thursday, November 20, 2014

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.

Tuesday, November 18, 2014

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.