The BCREA Commercial Leading Indicator (CLI) pushed higher in the first quarter of 2016, reflecting a strong and growing BC economy. The CLI index posted a 1.1 point increase to 120.8, eclipsing the previous index high of 120.1 set in the first quarter of 2015.

“The BC economy is surging,” said BCREA economist Brendon Ogmundson. “The economic climate in the province is, and is expected to remain, very conducive to rising commercial real estate activity over the next year.”

After flattening out for several quarters, the trend in the CLI is now reflecting the building momentum in the BC economy. Strong economic activity from rising retail sales to improvement in manufacturing shipments and wholesale trade along with a very strong provincial job market helped off set jittery financial markets to push the CLI to a record high in the first quarter.


Canada Mortgage and Housing Corporation’s (CMHC) latest Housing Market Assessment (HMA) 2016 Q1 reports moderate evidence of overvaluation in housing markets across the country. Broken down across the 15 centres covered by the HMA, overvaluation and overbuilding are the most prevalent problematic conditions with overvaluation detected in eight centres and overbuilding in seven centres.

“The evidence of overbuilding has increased since the previous assessment in Calgary, Saskatoon, Regina, and Ottawa due to either higher vacancy rates, high inventory of new and unsold units, or a combination of both. As more centres are now showing problematic overbuilding conditions, inventory management is becoming more important,” said Bob Dugan, CMHC’s Chief Economist.

The HMA points to strong overall evidence of problematic conditions in Calgary, Saskatoon, and Regina due to the detection of overvaluation and overbuilding. Low oil prices are impacting Alberta and Saskatchewan, weakening demographic and economic fundamentals such as migration, employment, and income, which are in turn affecting housing markets.

In Toronto, overall strong evidence of problematic conditions reflects a combination of price acceleration and overvaluation. We are also monitoring for the potential emergence of overbuilding in Toronto due to the high number of condominium units under construction. Inventory management therefore continues to be necessary to make sure that these condominium units under construction do not remain unsold upon completion. 


In Winnipeg, the evidence of problematic conditions has been lowered from strong to moderate. This is due to the evidence of overvaluation being reduced with improving economic and demographic fundamentals.

The HMA evaluates the extent to which there is evidence of problematic housing market conditions in 15 Census Metropolitan Areas (CMAs). The results released today include those for the national market as well as 15 Census Metropolitan Areas (CMAs) – Victoria, Vancouver, Edmonton, Calgary, Saskatoon, Regina, Winnipeg, Hamilton, Toronto, Ottawa, Montréal, Québec, Moncton, Halifax, and St. John’s.

The HMA analytical framework is designed to assess housing market conditions by taking into consideration the economic, financial and demographic drivers of housing markets. The use of multiple indicators of housing conditions, which incorporate various data sources and price measures, provides a robust picture of overall housing market conditions.


The British Columbia Real Estate Association (BCREA) reports that a record number of home sales were recorded in the province for the month of December. A total of 6,590 residential unit sales were recorded by the Multiple Listing Service® (MLS®) last month, up 29.8 per cent from the same month the previous year. Total sales dollar volume hit a record $4.62 billion for the month of December, up 55.4 per cent compared to the previous year.

The average MLS® residential price in the province climbed above the $700,000 threshold for the first time in BC last month, rising 19.7 from December 2014 to $700,943.

“The 2015 housing market finished in dramatic fashion, with record demand for the month of December,” said Cameron Muir, BCREA Chief Economist. “BC home sales breeched the 100,000 unit threshold in 2015, and it was only the third time on record that this high watermark was achieved.”

The combination of record home average home prices and near record annual unit sales prices propelled the dollar volume of MLS® residential to a record $65.3 billion in 2015, up nearly 37 per cent from the previous year. The average annual residential price reached a record $636,627 last year, up 12 per cent from 2014. A total of 102,517 residential unit sales were recorded, an increase of 22 per cent compared to 2014. A record 106,310 residential unit sales were recorded in 2005, while the only other year eclipsing 2015 were 2007 when 102,805 unit sales were recorded.


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Home, $weet home.

That’s an appropriate headline for your financial plan if you intend to stay in your house for the long term rather than move to a retirement community. Solid arguments can be made for aging in place, but there will be ever-growing expenses. Plan for them rather than having them take you by surprise.

Baby boomers may have the most intense relationship with their homes of any generation in this country’s history. Houses give them both emotional and financial sustenance, although the latter benefit is more complex than you might think.

As described in this recent column, owners in Toronto are hanging on to their houses rather than selling into a market in which prices are soaring. Fear of missing out on further gains is a factor, and so are the harsh economics of a hot housing market. Money made from selling a house at a nice profit may disappear into the cost of buying another home that has also appreciated.

Emotional attachments to home shouldn’t be underestimated.

A survey of people aged 50 and older commissioned by Royal Bank of Canada a few years back found that staying at home as long as possible using home care was a much more popular choice than moving into a retirement residence.

There are two levels of costs to consider if you want to stay in your home through retirement – one for maintenance and upkeep on your home and the other for home care services to help when you’re unable to look after yourself. Maintenance issues may be more of an issue than you think.

Cary Williams of Pavilion Investment House in Edmonton says it’s simple to arrange for someone to cut the grass and shovel the driveway. “But there are a lot of small things that go into better living, like making sure the furnace filters are getting changed.”

Maybe your children and grandchildren can help with these jobs. If not, there’s the hassle of finding people to help and the cost of hiring them. One of the virtues of condo living is that a lot of this work is done for you.

Mr. Williams describes three periods of retirement – the first is the fun phase when you’re active and travel seems appealing, and the second is when you slow down and are more content with routine activities. The third is when you’re less able to look after yourself. “Mobility starts to fall off, you have health challenges and you need more and more help.”

At this point, you can either remain in your house and take advantage of home care, or move to a long-term care facility. Initially, home care could be the cheaper option.

Data collected by insurer Sun Life Financial shows that the median cost for a one-bedroom suite in an Alberta retirement home is $3,525 a month, based on extremes of $1,235 to $5,400. Home care would be cheaper if you bought a small block of hours every week for services such as meal preparation, laundry and help around your home. But there’s a crossover point when home care becomes more expensive, says Lee Anne Davies, chief executive officer of the consulting firm Agenomics. “The overlooked challenge with home care is that, generally for a senior, around-the-clock care becomes necessary,” she said in an e-mail. “That will be more expensive than long-term care.”

There are also organizational challenges that may involve your family as well as you, Ms. Davies said. Top issues include finding people who show up on time on a regular basis and, if 24-7 care is required, arranging care for both weekday and weekend shifts.

Home care may still be good value, even if the costs are higher in both money and time spent co-ordinating care. Ms. Davies said there are lots of part-time workers in retirement homes, and that means some staff won’t have deep relationships with seniors living in the facility. “Quite frankly, do you want the person who assists with your toileting or showers to be someone different each time?”

Pavilion Investment House’s Mr. Williams encourages seniors and their adult kids to have ongoing conversations about care options that include costs and affordability. The home-loving baby boom generation is used to paying for what it wants, and this may well include home care.


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The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

The global economy is evolving largely as the Bank projected in its April Monetary Policy Report (MPR). In the United States, despite weakness in the first quarter, a number of indicators, including employment, point to a return to solid growth in 2016. Financial conditions remain accommodative, with ongoing geopolitical factors contributing to fragile market sentiment. Oil prices are higher, in part because of short-term supply disruptions.

In Canada, the economy’s structural adjustment to the oil price shock continues, but is proving to be uneven. Growth in the first quarter of 2016 appears to be in line with the Bank’s April projection, although business investment and intentions remain disappointing. The second quarter will be much weaker than predicted because of the devastating Alberta wildfires. The Bank’s preliminary assessment is that fire-related destruction and the associated halt to oil production will cut about 1 1/4 percentage points off real GDP growth in the second quarter. The economy is expected to rebound in the third quarter, as oil production resumes and reconstruction begins. While the Canadian dollar has been fluctuating in response to shifting expectations of US monetary policy and higher oil prices, it is now close to the level assumed in April.

Inflation is roughly in line with the Bank’s expectations. Total CPI inflation has risen recently, largely due to movements in gasoline prices, but remains slightly below the 2 per cent target. Measures of core inflation remain close to 2 per cent, reflecting the offsetting influences of past exchange rate depreciation and excess capacity.

Canada’s housing market continues to display strong regional divergences, reinforced by the complex adjustment underway in the economy. In this context, household vulnerabilities have moved higher. Meanwhile, the risks to the Bank’s inflation projection remain roughly balanced. Therefore, the Bank’s Governing Council judges that the current stance of monetary policy is still appropriate, and the target for the overnight rate remains at 1/2 per cent.


As the state of emergency in Fort McMurray continues, Canada Mortgage and Housing Corporation (CMHC) is monitoring the situation closely and will work with its partners to support those affected by the devastating forest fires. Specific information as to what properties have been damaged is still very limited but CMHC is working to better understand its exposure as more information becomes available.

Mortgage Loan Insurance
CMHC has provided lenders with a number of options to support CMHC-insured homeowners affected by these unfortunate events. Homeowners are encouraged to contact their financial institution at the first sign of difficulty to discuss their individual situations and options.

Mortgage loan insurance protects lenders against mortgage default. CMHC mortgage loan insurance does not provide coverage for force majeure. Lenders are required to maintain standard all-risk insurance to protect against loss or damage by fire to buildings and contents. CMHC’s potential loss is therefore limited to claims resulting from the indirect economic consequences of the event such as a decline in property value.

A detailed summary and explanation of CMHC’s exposure is outlined in the backgrounder below.

Claim losses to CMHC are not expected to be significant as lenders work directly with borrowers to address any required repairs, recoup losses under existing property insurance policies and access any disaster relief, emergency funds and/or other assistance as available and appropriate.

CMHC will continue to monitor the situation and will consider additional default management tools to further assist lenders as the rebuilding situation unfolds. As Canada’s national mortgage loan insurer, CMHC’s continued presence will play a stabilizing role and help the residents of Fort McMurray meet their housing needs.

Assisted Housing
CMHC provides funding to housing providers under a variety of operating agreements directly and through the Province of Alberta under federal-provincial agreements. CMHC also has ongoing operating agreements with three First Nations in the affected area, the Fort McMurray First Nation, the Chipewyan Prairie First Nation and the Fort McKay First Nation, who receive subsidy funding from CMHC under the On-Reserve Non-Profit Housing Program.

CMHC has not received any reports of damaged or destroyed federally subsidized social housing units or to the three First Nation communities in and around the Fort McMurray area.

Should federally subsidized social housing units become damaged or destroyed, CMHC will work with housing providers, the Alberta Ministry of Seniors and Housing and the Alberta Emergency Management Agency to rebuild and/or relocate residents.

CMHC is keeping lines of communication open with the First Nation. Should homes on reserve become damaged or destroyed, CMHC will work with the First Nation, their insurer, Indigenous and Northern Affairs Canada and Alberta Emergency Management Agency.

CMHC Securitization ensures an adequate supply of funds for mortgage lending and the availability of mortgage credit in Canada through the guarantee of National Housing Act Mortgage-Backed Securities (NHA MBS) and Canada Mortgage Bonds (CMB).

The securitization exposure to mortgages in Fort McMurray is mostly through large diversified financial institutions and no NHA MBS Issuer appears to be overly concentrated in the area or incapable of absorbing potential losses. Consequently, the probability of any securitizationrelated losses to CMHC is remote.

For lenders with securitized loans, CMHC is having discussions to explain workout techniques that will allow the loans to remain in the securitized pools.


The British Columbia Real Estate Association (BCREA) reports that a record 12,969 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in April, up 30.3 per cent from the same month last year. Home sales last month beat March’s record of 12,560 units. Total sales dollar volume was $9.64 billion in April, up 52.7 per cent compared to the previous year. The average MLS® residential price in the province was up 17.2 per cent year-over-year, to $743,640.

“Housing demand is exceptionally strong across the southern regions of the province,” said Cameron Muir, BCREA Chief Economist. “Consumers appear to be particularly active in the Vancouver Island, the Fraser Valley and the Thompson/Okanagan regions.”

“Strong employment growth is helping underpin consumer confidence,” added Muir. The BC economy employed more than 78,000 additional workers during the first four months of the year, an increase of 3.5 per cent compared to the same period last year.

The year-to-date, BC residential sales dollar volume increased 64.3 per cent to $31.2 billion, when compared with the same period in 2015. Residential unit sales climbed by 36.2 per cent to 28,028 units, while the average MLS® residential price was up 20.6 per cent to $761,860.


The trend measure of housing starts in Canada was 195,064 units in April compared to 196,103 in March, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.


“While the trend for Canada remained stable in April, there were offsetting differences at the local level, notably in Vancouver and Montréal,” said Bob Dugan, CMHC Chief Economist. “Condo construction is slowing down in Montreal as builders are managing inventories by channelling demand to units that have been completed but remain unsold.”

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR for all areas in Canada was 191,512 units in April, down from 202,375 units in March. The SAAR of urban starts decreased by 4.6 per cent in April to 174,810 units. Multiple urban starts decreased by 4.0 per cent to 117,851 units in April and the single-detached urban starts decreased by 5.8 per cent to 56,959 units.

In April, the seasonally adjusted annual rate of urban starts increased in the Prairies, British Columbia, Atlantic Canada, but decreased in Ontario and Québec.

Rural starts were estimated at a seasonally adjusted annual rate of 16,702 units.

Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.