Provincial Outlook: What's Moving the Market (BC)

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


2/40

Outline

. ere re e ow

2. Housin Demand Drivers

Mortgage Rates

Economic and job growth

3. Cross Canada Comparison


3/40

BC Resale Market Balanced

MLS Sales to New MLS Listings ratio, per cent

80

100

60

Balanced

20

40Buyers

0

Sources: CREA, CMHC calculation


4/40

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


5/40

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


6/40

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


7/40

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


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Housing Demand Drivers

Mortgage rates


9/40

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


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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


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Mortgage rates



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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


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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


15/40

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


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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


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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


18/40

Consumer Spending to Improve

5,000

4,800

4,600

4,200

Source: Statistics Canada

2008 2009 2010 2011


19/40

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


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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


21/40

Employment to Expand in 2012

Per cent

4

erta ntario ancouver

2

3

1

-1

Source: Statistics Canada, Labour Force Survey, CMHC Forecast


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Mortgage rates


Migration and demographics


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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


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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


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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


26/40

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


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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

, , ,



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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



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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



30/40

Vancouver is a Destination and a Source

Rest of BCKelowna

KamloopsPenticton

Victoria

Duncan


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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


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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


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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


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Housing Starts to Increase in 2012

Thousands Single-Detached

30

Multiple-Family

20

10

0

Source: CMHC, Q4 2011 Forecast


35/40

Cross-Canada Housing Market Comparison


36/40

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


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Risks to the Outlook

Global financial developments

Provincial tax changes

Migration trends


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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

Provincial Outlook: What's Moving the Market (BC)

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