Inflation to Return to Target Range in Q2

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Now with inflation moderating, the Bank is standing pat as it monitors how the impacts of past rate increases work their way through the economy.

Metadata

Provider:

GlobeNewswire, Inc.

Retrieved on:

Wednesday, April 12, 2023

Information

Tags:

Intelligence, Unemployment, Housing, Policy, Sale, Bank, OPEC, Growth, Environment, Metro Vancouver Regional District

Geotags:

VANCOUVER, BC, CA, CANADA, METRO, BRITISH COLUMBIA, BERLIN, UKRAINE

⚠ generated by AI ↴

Organisation:

RENNIE MARKETING SYSTEMS, RENNIE INTELLIGENCE, RENNIE

Summary

Key Points:

Now with inflation moderating, the Bank is standing pat as it monitors how the impacts of past rate increases work their way through the economy.
Expect additional growth in permanent resident additions and permit holders, with BC set to accommodate an outsized share of them.
Watch resale prices as a leading indicator to pre-sale activity: when the former rises, the latter follows, and vice versa.
British Columbia, meanwhile, is looking to preserve its rental housing stock with the addition of the rental affordability fund.

VANCOUVER, British Columbia, April 12, 2023 (GLOBE NEWSWIRE) -- The rennie landscape, a semi-annual compendium of factors affecting the Metro Vancouver housing market, reports in its Spring 2023 edition, out today, to expect significant declines in the headline inflation rate in the next three months, with the overall rate of inflation dipping below 3% by late spring.

Persistently high inflation—which peaked in Canada at 8.1% in June 2022—prompted the Bank of Canada to embark on a mission of almost unprecedented rate increases from March 2022 to January 2023.

Now with inflation moderating, the Bank is standing pat as it monitors how the impacts of past rate increases work their way through the economy. For context, today’s Canadian inflation rate of 5.2% remains well outside the Bank of Canada’s target range of 1–3%

Ryan Berlin, Senior Economist & Director of Intelligence at rennie, notes, “There remains some degree of uncertainty around the path of inflation due to the ongoing war in Ukraine, the could-be banking crisis, the impact of OPEC production cuts, and China’s emergence from Zero-Covid; however, the inertia in inflation is downward, with the end of our vice-like interest rate environment coming into view.”

“This should bring some relief to household budgets that have been under duress for more than a year,” Berlin said.

Canadian Rates_rennie.png

The Spring 2023 edition of the rennie landscape, which includes an in-depth analysis of the myriad factors impacting Metro Vancouver’s housing market, also revealed:

The labour market, both nationally and locally, remains resilient, with a persistently low unemployment rate, growing job counts, and increasing labour force participation. Job vacancies are falling, though they’re higher than desired in some sectors. While vice-like interest rates may dampen labour market performance going forward, they have not appreciably slowed hiring to-date.
Canada and British Columbia are growing faster than ever, as international migration has reached historic levels. Expect additional growth in permanent resident additions and permit holders, with BC set to accommodate an outsized share of them.
The volume of mortgage origination is slowing, as higher interest rates have gummed up housing market activity. Debt-service ratios, while rising, are in check and mortgage arrears are near all-time lows. The volume of outstanding variable-rate mortgages has grown and some borrowers are making payments that do not cover their interest costs, causing their outstanding balances to grow.
The availability of mortgage-free equity is impacting our housing market, to the tune of billions of dollars being released annually in Metro Vancouver. Watch resale prices as a leading indicator to pre-sale activity: when the former rises, the latter follows, and vice versa. New purpose-built rental housing construction is increasing after years of being dormant, but it’s way behind on a per capita basis. Foreign buyers may be banned from purchasing today (mostly), but many purchased before the ban took effect on January 1st.
With many of the major policy announcements of 2022 now implemented, governments will be watching to see how their policies fare. British Columbia, meanwhile, is looking to preserve its rental housing stock with the addition of the rental affordability fund.

About the rennie landscape
The rennie intelligence division has just released its semi-annual publication, the rennie landscape, which provides thoughtful and contemporary analysis of the myriad factors impacting Metro Vancouver’s housing market. The commentary in the rennie landscape is lively, and the insights are objective and data-driven. Key stakeholders in the real estate industry in Metro Vancouver—including developers, commercial brokers, realtors, and institutional investors—rely on the rennie landscape for its succinct review of the latest trends that matter to our market.

About rennie intelligence
The rennie intelligence division comprises an in-house demographer, senior economist, and market analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie. For more information, visit www.rennie.com/intelligence.

About rennie
rennie brings a thoughtful, trusted approach to real estate, supporting their clients and communities for more than 40 years. A fully-integrated real estate company, rennie offers developer services and advisory services along with their brokerage, rennie and associates realty. Founded on a people-first culture, their growing team of 130+ head office staff and 240+ real estate advisors work seamlessly together to deliver exceptional experiences and service. Collectively, the rennie team provides their clients with the confidence they need to make informed decisions when buying, selling, or building a home or community. To learn more, visit rennie.com.

For more information, interviews, high-res photos, or to request a physical copy of the Spring 2023 rennie landscape, please contact:
Ryan Berlin	Melissa Faulkner
Senior Economist & Director of Intelligence	Communications Coordinator
604.783.1714	[email protected]
[email protected]

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/de5d527b-f99c-437d-a086-4d99bc04782b