Kootenay Connector Real Estate Blog

BC Commercial Leading Indicator Points to Growth in 2014

The British Columbia Real Estate Association (BCREA) Commercial Leading Indicator (CLI) rose for the third consecutive quarter, increasing 0.4 points in the third quarter of 2013 to 114.1. On a year-over-year basis, the CLI is 0.8 per cent above the third quarter of 2012 after reaching an all-time high of 116.1 in the second quarter of 2007.

After flattening out through 2012, the trend in the CLI has turned upward. An upturn in the CLI trend is historically a good signal of expanding commercial real estate activity in the following two to four quarters.

"The CLI rose for a third consecutive quarter as growth in retail sales and office employment more than offset a decline in financial conditions,” said Brendon Ogmundson, BCREA Economist. “The rising trend in the CLI points to an improving BC economy and stronger commercial real estate activity in 2014."

Canadian Retail Sales and Consumer Price Inflation

Canadian retail sales rose 1 per cent in September, the third consecutive monthly increase. The advance in sales was largely attributable to higher sales of motor vehicles and parts. Excluding motor-vehicles, sales were flat. Given today's retail sales data, our Canadian GDP tracking model estimates third quarter growth at 2.7 per cent.

Retail sales in BC were up for a second straight month, rising 0.4 per cent month-over-month. Compared to September 2012, sales were up 3.1 per cent. Year-to-date, BC retail sales are up just 1.1 per cent.

Declining gas prices pushed Canadian inflation lower in October, falling from an annual rate of 1.1 per cent in September to just 0.7 per cent in the 12 months to October. The Bank of Canada's preferred measure of core inflation, which excludes the most volatile components of the CPI, continues to trend well below the Bank's 2 per cent inflation target, rising just 1.2 per cent.

BCREA Housing Market Update (November 2013) (+playlist)

BCREA Commercial Leading Indicator Discussion (November 2013) (+playlist)

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Canadian Manufacturing Sales

Canadian manufacturing sales increased 0.6 per cent in September, the fourth increase in the past five months. The increase was primarily the result of higher sales in the motor vehicle assembly and food industries, though sales rose in 11 of 21 manufacturing sectors.

In BC, manufacturing sales rose 2.3 per cent from August and 4.5 per cent year-over-year. September's increase in sales was fairly broad based with shipments of both non-durable goods growing 3 per cent and durable goods rising 1.7 per cent. Year-to-date, total BC manufacturing sales are 1.8 per cent higher than last year.

BC Home Sales Post Strongest October in Four Years

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.