Climbing back? - The Orca

Climbing back?

Ryan Berlin

Ryan Berlin: Don't look now, but there's cause for cautious optimism in the housing and jobs markets.

To say the past few months have been challenging would be an understatement.

We have all been impacted by COVID-19, directly or indirectly, and more or less, at home, in the workplace, and in our communities. Collectively we have been dealing with much uncertainty while trying to synthesize a dizzying amount of information aimed at keeping us safe, secure, and solvent.

Against this backdrop, it was welcome news to observe a number of positive storylines emerging out of May’s data on our real estate market and our economy.

Our housing market has been resilient and remains balanced

It’s true that MLS sales across the Vancouver Region in May were down 44% versus one year earlier, with reduced market activity that set in at the end of March continuing to prevail. But having said that, we would be remiss to not acknowledge that there were still 2,265 sales in May, meaning that 2,265 households made a significant financial commitment during the worst economic downturn we’ve experienced in almost a century. That is somewhat remarkable.

Furthermore, May’s sales count was significantly higher than in April, with transactions jumping by 28% on a month-over-month basis, compared to the past-decade April-to-May sales bump of 6%.

On the supply side of the market, inventory has become increasingly constrained, with May representing the 8th straight month of year-over-year declines in total listings. Compare this to the lead-up to the 2008/9 Great Recession and its aftermath, when our market saw inventory expand for 15 consecutive months. Prices have consequently remained stable through May, with the region’s benchmark price down 0.1%, and the average price up 1.2%, versus April.

Labour market green shoots: have we reached the bottom? 

After Canada shed 3 million jobs in March and April–by far the most ever lost in a two-month period–almost 300,000 jobs were added in May, surprising many market analysts. British Columbia added just over 43,000 positions, and while Metro Vancouver lost 8,500 jobs in May–marking its third consecutive month of losses–the magnitude of decline paled in comparison to the almost 260,000 jobs lost in March and April.

Encouragingly, the employment surge in BC was driven by positions that had been hit hardest at the outset of our Great Suppression, with younger workers and jobs in retail, accommodation, and food services leading the way, with all of the growth seen in full-time work.

We are cautiously optimistic about our path ahead as British Columbia enters Phase 2 of its re-opening plan. Look for additional modest employment gains in June across BC–including Metro Vancouver for the first time in months–along with continued increases in home sales.

Ryan Berlin is the Senior Economist with rennie intelligence.