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8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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The Pro in i l look:
Whats Moving the Market,
Carol Frketich, BC Re ionalEconomist
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Outline
. ere re e ow
2. Housin Demand Drivers
Mortgage Rates
Economic and job growth
3. Cross Canada Comparison
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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BC Resale Market Balanced
MLS Sales to New MLS Listings ratio, per cent
80
100
60
Balanced
20
40Buyers
0
Sources: CREA, CMHC calculation
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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BC Average MLS Price to Move Back to Trend
$700,000
$600,000
a ance
$500,000
$400,000
$300,000
Sources: CREA, CMHC calculation
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Resale Market Conditions Vary Across BC
MLS Sales to New MLS Listings ratio, per cent
40
50
20
30
0
10
Sources: CREA October 2011 data, CMHC calculation
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Housing Starts on Track with HOC Forecast
All Areas BC Housing Starts, thousands, SAAR
30 Forecast:25,900
20
10
15
0
5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: CMHC
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Homes Under Construction Turns Up
In Areas with 50,000+ population
40,000
,
10,000
0
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source: CMHC
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Housing Demand Drivers
Mortgage rates
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Effective Interest Rates Low and Stable
Per cent
6
Household
5
us ness
4
2
3
05/01/2007 05/01/2008 05/01/2009 05/01/2010 05/01/2011
Source: Bank of Canada
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Monetary Conditions to Support Housing
-
4
Total CPI
an o ana a
mandate renewal3
US Fed & US interest
2rate outlook
C stren th continues
Core CPI
2010 2011
Source: Bank of Canada
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Mortgage Rates Stable and Low
Selected Interest Rates, Per cent
7
6
5-year posted
5
1-year posted
. .
3
3.4 to 3.8%
2007 2008 2009 2010 2011 2012 F
Source: Bank of Canada, CMHC Forecast
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Housing Demand Drivers
Mortgage rates
Economic and job growth
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Global Growth Moderating
Per Cent
8
102010 2011F 2012F
4
6
0
2
-2
China Euro Area Japan United Canada British
Sources: Statistics Canada, Bank of Canada Monetary Policy Report October 2011,CMHC Forecasts for Canada and BC
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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BC Economic 2012 Outlook Summary
BC well positioned for globaltra e
Consumer pull-back slows growtht s year, comes ac n
Employment gains to spread nextyear; s rom par - me o u -time continues
,generates demand for goods andservices, including housing
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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BC Trade Pattern Shifts to Asia-Pacific
2011 YTD United
States
Japan
n e
States
Japan
People'sRe ublicTourism Victoria
People'sRe ublic
of ChinaSouthKorea
of ChinaSouthKorea
OtherOther
Source: BC Stats , CMHC calculation
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Commodity Prices and Regional Impacts
20
ange ont go
% Change Year Ago250
(2003=100)
10
15
150
200
5
50
100
-5
Oil & Gas Metal & Forest
0
Minerals
Products
Source: BMO Capital Markets, October 2011
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Businesses Investing in BC
Private and Public
planned50,000
Capital Expenditures
($ millions)
increase
30 000
40,000
inventory -66.2B
20,000
0
,
Sources: Statistics Canada, BC Ministry of Jobs, Tourism and Innovation
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Consumer Spending to Improve
5,000
4,800
4,600
4,200
Source: Statistics Canada
2008 2009 2010 2011
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Vancouver Job Growth is the Engine for BC
Employment index, 2008 monthly peak =100
104 Vancouver
100British
Columbia
96
98
92
94
2008 2009 2010 2011 2012
Sources: Statistics Canada, CMHC calculation, October 2011 latest data point
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Where Are the BC Job Gains?
Change in Employment
Full-time
Oct '11 from Dec '10 YTD Oct
Part-time
Service sector
-10 000 0 10 000 20 000 30 000 40 000 50 000
Goods sector
Source: Statistics Canada, Labour Force Survey
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Employment to Expand in 2012
Per cent
4
erta ntario ancouver
2
3
1
-1
Source: Statistics Canada, Labour Force Survey, CMHC Forecast
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Housing Demand Drivers
Mortgage rates
Economic and job growth
Migration and demographics
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Housing Starts Track Household Formation
ThousandsHousing Starts Household Formation
40
30
10
20
0
Sources: CMHC Starts and Completions Survey and Forecast, BC Stats, P.E.O.P.L.E. 36
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Migration Trends to Improve in 2012
25,000
30,000
YTD 2010 YTD 2011 2012F
15,000
20,000
5,000
10,000
-5,0000
Source: Statistics Canada, CMHC Q4 2011 Forecast
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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The Next Home Buyers
Within six months of arrivalo new mm grants were
homeowners
At four years, more than halfof new Canadians were
25
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Immigration from Asia-Pacific to BC
Number of Permanent Residents Landin in BC
20,000
1991
Tiananmen IncidentEarl 2000s
15,000
Hong Kong1984
1997 98
Asian Financial CrisisAsian economies gathered
momentum
5,000
,Taiwan
Mainland China
nnounce ong ong
handover in 1997
0
Source: BC Statistics, Citizenship and Immigration Canada
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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BC Attracts Investor Immigrants
Q2 2011
.
personal wealth,$800K investment
Tourism Victoria
Canada
BC
Just under half of
Q2 2010
landings in BC
,14% from Taiwan
, , ,
Source: Statistics Canada
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Vancouver Attracts Younger People
Per cent of net migration by age
50 BC Vancouver
30
40
20
0
10
0-17 years 18-24 years 25-44 years 45-64 years 65+ years
Source: Statistics Canada
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Interprovincial Migration Trends Favour BC
Ontario and Alberta BCs lower unem lo ment 60
Percent
From AB From ONT
rate than Ontario points to
migration gains 40
50
Vancouver captures 50% or
more of migrants from20
30
Vancouver share from0
10
Vancouver Non-CMA BC
Source: Statistics Canada
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Vancouver is a Destination and a Source
Rest of BCKelowna
KamloopsPenticton
Victoria
Duncan
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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BC: 34,000 New Households Each Year
458
134
34,216
244
706
22,1865,467
4,189
833
Sources: BC Stats, P.E.O.P.L.E. 36,
CMHC calculation average annualgrowth in households 2011 - 2015
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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19,000 New Households Each year
Vancouver CMA +18,728
Co uitlam
West Van+268
North Van+892
Maple Ridge/
P Meadows
+2,667
Burnaby
+1,912
Vancouver
+3,129
own own
+680
W Side +72+ ,
Surrey
Richmond
+2,134
New West
+522 Abbotsford
CMA
+1,932
E Side
+2,377
+651 Langley+1,757
,
White Rock
+615
Sources: BC Stats, P.E.O.P.L.E. 36, CMHC calculation average annual growth in households 2011 - 2015
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Vancouver to Lead New Home Construction
2012F: 28,500ancouver
Victoria 1,850
Kelowna 1,125
Nanaimo 775
Abbotsford 650
Kamloo s 625
Prince George190
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Housing Starts to Increase in 2012
Thousands Single-Detached
30
Multiple-Family
20
10
0
Source: CMHC, Q4 2011 Forecast
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Cross-Canada Housing Market Comparison
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Western Canada to Lead Growth
Per Cent
3.5
4
.
1.6
2.0
2
1
0
British Columbia Alberta Ontario Quebec
Source: CMHC Q4 2011 Forecast
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BC Existing Home Sales to Pick Up
BC 74,640 77,200 81,900% -12.2 3.4 6.1
ALTA 49,723 52,800 53,900
% -13.6 6.2 2.1
ONT 195 591 195 900 195 900
15%Sales as % of Housing Stock
Total MLS
% -0.1 0.2 0.0
QUE 80,033 76,900 79,3005%
10%
. - . .
CANADA 446,484 450,000 457,600
% -3.9 0.8 1.7
0%
1996 1998 2000 2002 2004 2006 2008 2010 2012F
Sources: CREA, Landcor, CMHC calculations and Q4 2011 Forecast
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BC Housing Starts Expected to Increase
BC 26,479 26,600 28,500% 64.7 0.5 7.1
ALTA 27,088 25,325 29,200
% 33.5 -6.5 15.3
ONT 60 433 67 399 62 400
% 20.0 11.5 -7.4
QUE 51,363 48,000 44,500
. - . - .
CAN 189,930 190,800 185,900
% 27.4 0.5 -2.6
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Risks to the Outlook
Global financial developments
Provincial tax changes
Migration trends
8/3/2019 Provincial Outlook: What's Moving the Market (BC)
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Whats Moving the Market in 2012?
Demand drivers stable in 2011, pick up in 2012
Low interest rate environment
ore u -time jo s in more parts o t eprovince
People moving to BC and Vancouver