Canadian CPI inflation registered 2.5 per cent (year-over-year) in January, a 0.2 point increase from November. Consumer prices were led higher by a 6.5 per cent rise in energy prices and a 4.2 per cent rise in food prices.  The Bank of Canada’s core inflation measure, which excludes food and energy prices, rose 2.1 per cent in January from 1.9 per cent in December. Consumer prices in BC were 1.7 per cent higher in January (year-over-year).
 
Inflation began 2012 slightly above the Bank of Canada’s 2 per cent target, with most categories of the CPI recording increases. While this suggests an underlying firmness to inflation, slack in Canadian  labour markets and expectations of slowing economic growth will likely place downward pressure on inflation in coming months. We therefore do not a change in the Bank of Canada’s monetary policy stance this year.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

In the United States, housing starts (a key bellwether for BC’s forestry sector) rose 1.5 per cent in January, coming in at a seasonally adjusted annual rate (SAAR) of 699,000 units.  US new home construction has improved in recent months with inventories falling and the drawn-out foreclosure process finally being addressed by policymakers. We expect the slow-healing to continue through 2012 with steady gains in housing starts throughout the year.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

“Increased market activity outside the Lower Mainland in January was offset by fewer sales in Vancouver and the Fraser Valley,” said Cameron Muir, BCREA Chief Economist. MLS® Residential sales rose 7 per cent to 1,620 units outside the Lower Mainland, while declining 10 per cent to 2,356 units in Vancouver and the Fraser Valley.

“While provincial sales activity was down in January from year ago levels, consumer demand has posted modest improvement since last fall, driven by low mortgage interest rates and gradually improving economic conditions,” added Muir.

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For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

To demonstrate the profession’s commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada’s real estate boards to ensure maximum exposure of properties listed for sale.

North American markets posted healthy gains on the back of a jobs report from the U.S. that showed significant, broad-based improvement. The U.S. economy added 200,000 new jobs in December.

“I’m often asked the question”So where do you think the stock market is going?” On one side , it’s hard to see how the Europeans will ever get out of their mess or Washington will be able to tackle the deficit. Then there is the issue of Demographics. The Canadian economist David Foot said that “demographics explains two-thirds of everything”. The “first baby-boomers” (think of Bill Clinton) will turn 65 this year. The boomers fuelled the S&P500 to a gain of 19% per year for the 20 year period between 1980 and 2000. This massive group, 80 million strong in the U.S., will hit retirement age in the next 20 years. It’s fair to say that boomers are less enamoured with equities than they were in the 80s and 90s. As they retire, and reflect on flat market performance over the last decade, they will likely stop chasing growth. The reverse dynamic could then take hold, as the same forces that drove markets higher in the 80s and 90s could work in reverse for the next 20 years. These forces will keep a lid on valuations in the coming years.

On the other side, corporate balance sheets are healthy and valuations are low, historically speaking. Interest rates are low and corporate earnings continue to surprise on the upside.

So where do I think the stock market’s going? Being in the industry, I am expected to have convictions on these matters. However, the best I can do is quote American financier, JP Morgan who responded to this question with “it will fluctuate”.

If you have a concentrated stock position, if you are heavily leveraged on margin, then yes, you should be worried. However if you are diversified, own good companies, and are getting decent advice from someone you trust, that’s a better place to be.”

Source: Ben Craig, Raymond James investments.

Looking at major metropolitan areas, housing starts rose 8.3 per cent year-over- year in Vancouver. In a bit of a role reversal, it was single family starts that drove growth, rising 50 per cent year over year while multi-family starts rose a modest 2 per cent. Abbotsford new home construction fell 54 per cent year-over-year in January due to weakness in both single-family and multi-family starts. New home construction in Victoria rose 5 per cent year-over-year in January due to strong growth in multi-family starts. Finally, new home construction in Kelowna continued to build on momentum from late 2011 as total starts rose 48 per cent year-over-year on balanced growth between single and multi-family starts.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

Canadian building permits ended the year up 11.1 per cent from November and reached their highest level since June 2007. Permitting activity was driven by a 16.1 per cent increase in residential permits, though non-residential permits were also higher in December. 

Construction intentions in BC did not follow the strong National trend, posting a decline of 16 per cent following a November that saw permits rise 31.5 per cent.  On a year-over-year basis, construction intentions were 27 per cent higher in December.  December permit activity was lower in all four of BC major metropolitan areas with Victoria posting the largest monthly decline. Notably, permit volume was lower on a year-over-year basis in all markets except Vancouver which was 74 per cent higher – signalling some potentially weak new construction activity outside of the Vancouver metro area in 2012.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

South of the border, the jobs news was much better. The United States labour market added 234,000 new jobs in January, well beyond market expectations of 150,000 jobs. Employment growth has averaged 200,000 jobs over the past three months, a strong sign that the US labour market is finally healing. The US unemployment rate fell to 8.3 per cent in January, the fifth straight monthly decline.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

Vancouver, Langley BC – January 27, 2012. The British Columbia Real Estate Association (BCREA) released its 2012 First Quarter Housing Forecast Update today.

“Modest economic growth at home and abroad is expected to limit growth in consumer demand both this year and in 2013,” said Cameron Muir, BCREA Chief Economist.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 2.1 per cent from 76,817 units in 2011 to 78,400 units this year, increasing a further 2.7 per cent to 80,500 units in 2013. The 15-year average is 79,000 unit sales. A record 106,310 MLS® residential sales were recorded in 2005.  

“While European sovereign debt concerns and a sluggish US economy will continue to impact consumer confidence, strong demand in the bond market is expected to keep mortgage interest rates at or near record lows for most of 2012,” added Muir.

Home prices in most BC markets are forecast to experience little change over the next 24 months as the supply of homes for sale more closely matches consumer demand. The average MLS® residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000.

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To view the full BCREA Housing Forecast Update, click here.

For more information, please contact:

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

To demonstrate the profession’s commitment to improving Quality of Lifein BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada’s real estate boards to ensure maximum exposure of properties listed for sale.