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Bank of Canada Interest Rate Announcement - May 30, 2018

5/30/2018

BCREA ECONOMICS NOW
Bank of Canada Interest Rate Announcement - May 30, 2018

The Bank of Canada decided to leave the target for the overnight policy rate unchanged at 1.25 per cent this morning. In the statement accompanying the decision, the Bank noted that inflation has been close to its two per cent target and will likely be higher in the near term than was previously forecast due to higher gasoline prices. Economic growth in the first quarter was stronger than expected due to rising exports and business investment, which helped to offset a B20 induced softening in housing activity. Overall, the Bank's view is that higher interest rates will be warranted to keep inflation near its target.

Although the Bank held steady today, with inflation rising to the Bank's two per cent target and the Canadian economy operating at or near capacity, interest rates are very likely headed higher, perhaps at the Bank's next meeting in July. That will translate to higher mortgage rates which, combined with the erosion of purchasing power from the mortgage stress test, will continue to temper housing demand in 2018.

For inquiries regarding statistical and economics-related news releases, please contact:
Cameron Muir; Chief Economist, 604.742.2780, cmuir@bcrea.bc.ca
Brendon Ogmundson; Economist, 604.742.2796, bogmundson@bcrea.bc.ca

The Housing Market Update video webcast is produced monthly by the British Columbia Real Estate Association. Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: "Copyright British Columbia Real Estate Association. Reprinted with permission." BCREA makes no guarantees as to the accuracy or completeness of this information.
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Phone 604.683.7702, Fax 604.683.8601
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Housing Market Update (May 2018)

5/18/2018

Click on image to watch BCREA Chief Economist Cameron Muir discuss the April 2018 statistics:

Canadian Housing Starts - May 8, 2018

5/8/2018

BCREA ECONOMICS NOW
Canadian Housing Starts - May 8, 2018

Canadian housing starts fell 5 per cent on a monthly basis in April to 214,379 units at a seasonally adjusted annual rate (SAAR). The six-month trend in Canadian housing starts was steady at about 226,000 units SAAR.

In BC, total housing starts declined 17 per cent on a monthly basis to 38,750 units SAAR and were down 11 per cent year-over-year. Multiple unit starts were down 10 per cent year-over year and 21 per cent month-over-month while single detached starts were down 11 per cent year-over-year and were flat compared to March.

Looking at census metropolitan areas (CMA) in BC:

Total starts in the Vancouver CMA were down 28 per cent monthly basis to 23,366 units SAAR. Year-over-year, Vancouver starts were down 21 per cent.

In the Victoria CMA, housing starts were down 8 per cent on a monthly basis. Although single detached starts were nearly double the previous month, a 26 per cent decline in multiple unit starts resulted in an overall decline in new home construction. Year-over-year, total starts were up 26 per cent.
In the Kelowna CMA, new home construction doubled on a monthly basis due to a surge in multiple unit starts. However, total starts were down 5 per cent compared to April 2017.

Housing starts in the Abbotsford-Mission CMA fell 66 per cent compared to March due to large declines in both single detached and multiple unit starts. Year-over-year, total housing starts were also down 66 per cent.

Bank of Canada Interest Rate Announcement - May 30, 2018

Housing Market Update (May 2018)

Canadian Housing Starts - May 8, 2018

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