Economic Insights from Dr. Sherry Cooper
Earlier this cycle, there were more job vacancies than people looking for work, so the drop in job openings didn't have a material impact on the economy. But that's no longer the case. September's inflation data confirms that the job market trend is downward.
Economic growth has been below potential since 2022, and preliminary third-quarter data indicate another slowdown to about 1.3% growth in Q3, well below the BoC's initial forecast. Hiring intentions remain woefully inadequate in the face of staggering population growth.
The 2024-2026 mortgage renewals "cliff" is manageable as long as the Bank of Canada cuts interest rates and the job market and economy don't weaken too much. Owing to the 75 basis point rate decline through September and the 50 bps cut in October, not all mortgages will renew at higher rates next year.
Royal Bank economists estimate that total mortgage payments in 2025 will increase by about 0.1% of total household disposable income as many extend amortizations to keep payments low.
The jobless rate, though declining a tick in September to 6.5%, is meaningfully higher than before the pandemic and is likely to rise to 7% next year.
The total number of job openings in the economy is 25% below what it was a year ago, and if it were to weaken further, the unemployment rate would rise even more.
Business start-ups are also sluggish, reflecting a business climate undermined by overly restrictive monetary policy.
The BoC must now aggressively cut interest rates. Monetary policy remains highly restrictive.
The Bank of Canada's Business Outlook Survey shows no sign of stabilization in the short term. Indeed, hiring intentions were virtually unchanged in Q3 and remained below the historical average. A significant number of companies are overstaffed.
The latest data show that the private sector vacancy rate is plummeting and has reached its lowest level since 2016. More than half of all small- and medium-sized businesses are fearful of weakening demand for their goods and services.
The number of active companies fell sharply in the second quarter due to a sharp jump in business closures and a low number of start-ups. The stagnation in the number of active companies in Canada since 2022 is undoubtedly one consequence of the extremely powerful tightening of monetary policy.
Thanks to everyone who went to the home show…
We had a great time at the Fall Home Show. Thanks to everyone who came out.
Hope to see you again at the Spring show…
Winterizing Your Home – Inside and Out!
With temperatures falling across many parts of the country, it’s a good time to start thinking of preparing your home for harsh winter conditions like snow and ice.
This process, called winterization, is usually performed in the fall before excessive cold arrives. Maintenance on both the exterior and interior of your home during this time can not only protect the structure from weather-related catastrophes, but it can also save you money by way of lower utility bills.
INTERIOR
Smoke and Carbon Monoxide Detectors
Schedule Furnace Maintenance
Clean and Inspect Chiminy
Remove Window Air Conditioner Units
Clean Dryer Vents
EXTERIOR
Clean Gutters
Shut Off Exterior Faucets & Drain Irrigation
Trim Trees and Bushes
Seal Gaps
Pathways / tairs
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Rising home sales a sign of market shift in the Fraser Valley?
SURREY, BC — Home sales in the Fraser Valley increased for the first time in five months following a sizable interest rate cut by the Bank of Canada in October.
The Fraser Valley Real Estate Board recorded 1,330 sales in October, up 35 per cent from September, and 37 per cent year-over-year.
New listings declined in October, down 5 per cent to 3,194, but increased 26 per cent year-over-year. Overall inventory dipped in October to 8,799, down three per cent from September, but up 34 per cent over last year. Rising sales and steady inventory levels have the Fraser Valley in a balanced market with a sales-to-active ratio of 15 per cent. The market is considered to be balanced when the ratio is between 12 per cent and 20 per cent.
Across the Fraser Valley in October, the average number of days to sell a single-family detached home was 34, while for a condo it was 32. Townhomes took, on average, 29 days to sell.
Benchmark prices in the Fraser Valley dipped for the seventh straight month in October, with the composite Benchmark price down 0.7 per cent to $971,700.
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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.