British Columbia Economic & Housing Update Robyn Adamache Senior Market Analyst, CMHC CANADA MORTGAGE AND HOUSING CORPORATION Housing market intelligence you can count on
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Today s Presentation Big Picture Trends in Key Housing Drivers Mortgage rates, employment, population BC Housing Market Overview
Economy: 2014 and 2015 Outlook: The Big Picture Mortgage rates to stay low and stable Sources of economic growth to broaden and strengthen Employment growth forecast to increase Housing Market: Resale markets will be balanced Price growth will slow, sales pick up Expect higher dollar volumes this year and next
BC Economic Indicators On Track Latest Month Latest Month YTD % change Employment (thousands, SA) August 2,327.6 0.5 Unemployment Rate (%, SA) August 6.1 6.1* Average Weekly Wage Rate August $897.54 0.9 Retail Sales ($millions) June 5,605 5.6 Non-res Building Permits ($millions) July 354.5 11.8 Res. Building Permits ($millions) July 752.5 2.5 Total Housing Starts (SAAR) August 34,864 7.4 Merchandise Exports ($millions) July 2,900 9.6 *YTD average level Sources: Statistics Canada, CMHC, BC Stats.
Mortgage Interest Rates to Remain Relatively Low Conventional mortgage, posted rates (per cent) 25 20 15 10 5-year fixed rate mortgage 2014f: 5.00 5.50% 2015f: 5.25 6.00% 1-year fixed rate mortgage 2014f: 3.00 3.25% 2015f: 3.20 4.00% 5 0 Source: Sources: Bank of of Canada; Canada, CMHC forecasts Q3 forecast
Modest Growth in BC Economy Per cent change in Real GDP 3.5 3.1 3.0 2.5 2.5 2.0 1.5 1.0 0.5 2013E 2014F 2015F 2.5 2.2 2.3 2.8 0.0 United States Canada British Columbia Sources: Statistics Canada, May 2014 Consensus Forecasts for US and Canada, CMHC Forecast for BC
Employment By Region Varies % change January to Aug, 2014 compared to 2013 BC Vancouver Abbotsford-Mission Victoria Kelowna Mainland/Southwest Vancouver Island/Coast Thompson/Okanagan Cariboo Kootenay North Coast/Nechako Northeast -12% -9% -6-4 -2 0 2 4 6 Source: Statistics Canada, Labour Force Survey Source: Statistics Canada, Labour Force Survey
Growth Sectors in the Okanagan UBC Okanagan Kelowna International Airport Kelowna General Hospital Non Residential Construction Agri-Tourism
Employment Outlook Annual per cent change 3 2012 2013 2014F YTD 2014 2015F 2 1 0-1 -2-3 0.6 British Columbia Kelowna 1.5 Sources: Statistics Canada, CMHC Forecast
BC s Population is Growing at 1.2% 20,000 15,000 10,000 5,000 0-5,000 3,000 2,000 1,000 0-1,000-2,000-3,000 Net International Migration 2010 2011 2012 2013 2014 Net Interprovincial Migration 2010 2011 2012 2013 2014 Source: Source: Statistics Statistics Canada Canada
Fewer People Moving to Kelowna from Outside BC Net Migration 4,500 3,500 2,500 1,500 500-500 Interprovincial Intraprovincial International -1,500 1998 2000 2002 2004 2006 2008 2010 2012 Source: Statistics Canada, BC Stats
Millenials & Retirees Will Drive Home Buying Annual Per cent Change in BC Population 2014-2018 5 4 4% 3 2 2% 1 0-1 -2-3 -2% <1% 15 to 24 25 to 44 45 to 64 65+ Source: BC Stats, P.E.O.P.L.E. 2014, CMHC calculations
Annual Increase in Households by CMA Households 35,000 30,000 25,000 20,000 15,000 1,640 9,435 1,538 1,703 1,630 8,544 Kelowna CMA Victoria CMA Abbotsford-Mission CMA 10,000 5,000 15,565 17,545 Rest of BC Vancouver CMA 0 2013 Average 2014-2018 Source: BC Stats, P.E.O.P.L.E. 2013, CMHC calculations
Regional Housing Markets
Market Dollar Volume by Board Area % Change YTD 2014 vs YTD 2013 British Columbia 23 Ok - Mainline 36% Greater Vancouver Fraser Valley Chilliwack 22% 25% 26% Victoria Vancouver Island 11% 13% Source: CREA, YTD = Jan - Aug
House Prices Move Higher MLS Benchmark Single Detached House Price $1,000,000 $978K $800,000 $600,000 $804K $522K G Vancouver Fraser Valley Victoria $567K $400,000 2007 $527K 2008 2009 2010 2011 2012 2013 $499K Source: Canadian Real Estate Association PROTECTED - CMHC Commercial/Competitive
Condo Prices Below Previous Peak MLS Benchmark Condo Apt Price, Lower Mainland $375,000 $350,000 Apr 08 $349K Apr 10 $343K Jun 14 $343K $325,000 $300,000 2007 2008 Mar 09 $300K 2009 2010 2011 2012 2013 Source: Canadian Real Estate Association PROTECTED - CMHC Commercial/Competitive
2014 and 2015 Outlook Continued gradual improvement in economy Mortgage rates stay low Population and employment growth support stable housing market
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