The Burbs

Steve Saretsky -

A much needed bounce for the Canadian economy as it recorded its third straight month of employment gains. After shedding three million jobs at the heigh of the pandemic, about 1.7 million jobs have returned, including 418,500 in July.

Unfortunately its not all rainbows and butterflies, as there are still 1.6 million Canadians without a job compared to this time last year. That’s still three times as many jobs lost when compared to the financial crisis nearly a decade ago. The unemployment rate sits at a dizzying 10.9%.

Indeed, these are tough times, but you certainly wouldn’t notice it in the Vancouver housing market. A flurry of activity has ensued with July data showing the busiest month of the year so far for both new listings and sales. People are re-assessing their living situations with the thought of quarantines and stay at home orders persisting into the new year.

As a result, downtown condos are selling off as buyers flock to single family homes, particularly in the suburbs. Downtown Vancouver condo sales collapsed, falling by 18% year-over-year. Meanwhile, house sales in the Fraser Valley surged 56% on a year-over-year basis, and were 16% above the ten year average in July. As inventory gets scooped up (down 26% from last year), house prices in the burbs are actually moving higher. Clearly the market doesn’t care that the unemployment rate has doubled. The lust for more space remains strong, with five year fixed mortgage rates continuing to fall, now down around 1.9%.

Three Things I’m Watching:

1. While the labour market is recovering, there are still 1.6 million Canadians who haven’t returned to work.

2. Foreign buying activity in BC continues to trend lower. Given borders are closed this is perhaps not overly surprising.

3. Fraser Valley single family house sales jumped 56% Y/Y in July.

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The Saretsky Report. December 2022